2008 - 2009 - Pinsent Masons Water Yearbook 2012 - 2013

I 

Pinsent Masons Water Yearbook 2008-2009

Copyright © Pinsent Masons LLP 2008 

Published by Pinsent Masons LLP 

Pinsent Masons LLP 

30 Aylesbury Street 

London EC1R 0ER 

Telephone: 020 7490 4000 

Facsimile: 020 7490 2545 

Email: enquiries@pinsentmasons.com 

Website: www.pinsentmasons.com 

ISBN (10) 0 9551747 4 0 

ISBN (13) 978 0 9551747 42 

Previous editions: 

Pinsent Masons Water Yearbook 2007 – 2008 ISBN 0-9551747-3-2 

Pinsent Masons Water Yearbook 2006 – 2007 ISBN 0-9551747-1-6 



Pinsent Masons Water Yearbook 2003 – 2004 ISBN 0 9537076-5-2 

Pinsent Masons Water Yearbook 2002 – 2003 ISBN 0 9537076 4 4 


Pinsent Masons Water Yearbook 2000 – 2001 ISBN 0 9537076 1 X 


All rights reserved. No part of this publication may be reproduced, stored in a retrieval 

system, or transmitted in any form or by any means, electronic, mechanical, 

photocopying, recording or otherwise, without the prior permission of the copyright 

owner. 

Whilst every effort has been made to check the accuracy of the information given in this 

book, readers should always make their own checks. Neither the author nor the publisher 

accepts any responsibility for misstatements made in it or for misunderstandings arising 

from it. The main text of this work reflects the information obtained by the author as at 

October 2008. 

II 


PINSENT MASONS WATER YEARBOOK 2008-2009 

PREFACE 

Human foibles and their impact on every sphere of human endeavour condemn history to 

repeating itself and in few fields more persistently than the industrial sector, with its water 

component a contender perhaps for the wooden spoon. 

Nationally and globally, it’s an industry of habit, of fixed and restricted itineraries through 

foreseeable avenues of repetition which, in a novelist, say, might be reassuring in guaranteeing 

the reader a predictable and easy ride, but in an industry sector it’s a threat to all that depend on 

it, especially the supply chain. This is a near-universal phenomenon, particularly in public 

service industries governed by contracts involving the private sector. Arguably, however, it’s 

worse for publicly-owned service facilities where investment spending priorities are determined 

as much by political ideology and horse-trading as by social need. 

The UK 

To be fair to the industry at the national level, however, it’s the regulatory regime, driven by 

legislation, that is ultimately responsible for the adverse consequences of this historical 

repetition. We’re on the verge of the twentieth anniversary of water privatisation in England and 

Wales, a period throughout which recurrent themes of past Asset Management Programmes reemerged 

with unfailing regularity, demonstrating the point. Lean threshold spending at the 

outset of a five-year investment programme, “balanced” by a tailing off again towards the end, 

and interspersed with a roughly three-year bounty period during which the supply chain is 

stretched to the full and beyond, have challenged the industry supply chain, stymied invariably 

by acute staff shortages triggered by the preceding famine period. It’s a recipe for serial havoc, 

and long-term erosion of industry capacity, as suppliers are forced to grapple with the peaks 

and troughs that have seemed an implacable feature of the industry’s landscape. 

We may, however, be at the dawn of a revolution in industry practice. The water companies, in 

the run-up to PR09, have been obliged to submit Strategic Direction Statements (SDS) 

containing an overview within the scope of their draft business plans, for a twenty-five year 

period - a challenge of alignment of commercial aspiration and strategic vision, not to say 

creativity! The plans themselves envisage an unprecedented investment of GBP27bn - up from 

GBP17bn in the previous AMP period – in the years 2010-2015, with just three companies 

(Thames, United Utilities and Severn Trent) accounting for 50 percent of the total programme 

and Thames alone committed to more than GBP6.5bn over the period. 

In addition, there are also signs of further change in industry practice, which suggest that the 

water companies may be moving away from the partnering arrangements of AMPs 3 and 4 by 

adopting a more hard-nosed approach to programme management. Delivery partners are 

iii 


increasingly being expected to shoulder a greater burden of risk and undergo competitive 

tendering for additional work under the AMP, or individual projects. 

In the south-east, all this inevitably begs an especially pertinent question of construction 

industry capacity. Whether, in particular, the clash between this major water industry spend, the 

huge Olympic games infrastructure programme and the imminent Cross Rail project is likely to 

put construction staff resources sufficiently under pressure to trigger escalating prices that will 

affect all three, not to mention the consumer, is a moot point. 

The regulator, moreover, doubtless sensitive to mounting public and political concern over cost 

escalation in public and utility services across the board, has also placed greater emphasis on 

costs vs benefits, throwing in a new Capital Incentive Scheme aimed at rewarding more 

challenging and accurate cost forecasting and methodologies for achieving them. 

Of course, whether measures such as these are substantive enough to add up to stepimprovements 

in regulatory performance, with benefits to industry productivity and efficiency 

overall, as well as in service delivery, remains to be seen. And we shall all be watching. 

The wider picture 

A major UK national priority highlighted by the Pitt Review, and earlier neatly and dramatically 

demonstrated by the widespread flooding in parts of England in 2007, is for “urgent and 

fundamental changes in the way the country is adapting to the increased risk of flooding and 

in…..improving the country’s flood resilience”, a process in which our industry will have to play a 

leading and formative role. 

As a priority, however, this is not a phenomenon confined to the UK, since climate change 

orthodoxy confidently predicts a global surge in extreme weather conditions, including flooding 

on an unprecedented scale, throughout the developed and developing world. While in theory 

this represents potential human catastrophe on a scale unknown since records began, it also 

offers enormous challenges for politicians and planners everywhere – and opportunities for the 

water industry. 

The author of this Yearbook, in common with other industry thinkers, has long advocated the 

more widespread adoption of private finance in the provision of water and wastewater services, 

as a means of accelerating infrastructure development, enhancing administrative transparency 

and combating the corruption rife in many countries. He does so once again in this latest 

edition, with his customary eloquence, his arguments given added force by the prevailing world 

financial crisis, not to mention the dwindling prospects for the Millennium Development Goals, a 

lesson, maybe, for the politicians responsible for this aspirational puff - less cant and posturing, 

more realism. However, in the absence of affordable and sustainable charging mechanisms in 

iv 


many countries, it has to be debatable whether foreseeable returns will ever be sufficient to pull 

the private investor. 

Local conditions will always ensure that problems will be unique to particular regions and 

localities, although the impact of flooding, for example, will always be aggravated by a cavalier 

approach to urban development in flood plains. While this might be unavoidable in some cases, 

it is wilfully and dangerously negligent in past and prospective development in England, for 

example, where a government has ridden roughshod over urban planning guidelines that were 

once the archetype for the world. Prudent development policies are needed to protect the 

public everywhere from disaster. 

An abiding problem in all societies, however, is that, wherever we are, the urban legacy from the 

past will largely dictate the scope for future development, since we cannot re-locate 

conurbations to more convenient, or safer, locations. All development, moreover, imposes 

strains on infrastructure, notably water. This is an object lesson for the developing world - 

where creeping industrialisation fuels urbanisation and mushrooming water consumption - which 

is being heeded in some countries. It drives us irresistibly to policies aimed at encouraging the 

use of water wisely, technological innovation, the more judicious planning of water extraction 

practices and the areas that perhaps offer the greatest potential for relieving water stress - 

improved water-efficiency/re-use in all its forms and desalination. All of these practices are 

becoming widespread in many countries, including, for example, Australia, Israel and 

Singapore, who almost certainly lead the UK, where progress in these areas has been very 

limited. The potential is enormous, at the micro level as well as the macro, inter alia, through 

measures like rainwater harvesting, dual plumbing systems, greywater recycling to lavatories, 

water-efficient fittings, zero-flush urinals and the use of non-potable source water (recovered 

sewage effluent) for irrigation, among other conservation practices. These are solutions to 

some of the most pressing issues the world has ever faced which engage the international 

water strategy ambitions of governments, planning authorities and industry. 

Pinsent Mason’s Water Yearbook, now celebrating its tenth year, once again tells the story of 

the world water markets more illuminatingly and comprehensively than other industry reference 

works. It represents an outstandingly successful collaboration between Pinsent Masons LLP, 

the London-based international law firm specialising in the global water industry, and Dr David 

Lloyd Owen of Envisager, the specialist consultancy in environmental services for the water, 

wastewater and renewable energy sectors. It provides an incomparable market reference for 

which they are again to be congratulated for its unparalleled scope. 

October 2008 

v 


DAVID LLOYD OWEN BIOGRAPHY 

Dr David Lloyd Owen 

David Lloyd Owen is the CEO of Envisager Limited, a company that advises companies, 

investment banks and governments on water and waste management markets and their 

competitive, regulatory and environmental drivers. He was an equity analyst at UBS (Savory 

Milln) and BNP Paribas and founded Ecofin Limited in 1991 and has followed the water and 

waste management sectors since 1989. In addition to writing nine editions of the Pinsent 

Masons Water Yearbook, he has written three books on the water services sector in Europe, 

one on 

water finance and is a columnist for Global Water Intelligence. He is Head of Research at 

WHEB Ventures, a non-executive director of EnviroGene Limited, a member of the advisory 

boards of Pictet Funds Water Fund and XPV Capita , and a member of Glâs Cymru Cyf (Dwr 

Cymru Welsh Water). 

His publications include: 

2006: Financing water and wastewater to 2025: From necessity to sustainability, Thomsons 

Financial, London 

2002: The European Water Industry: Market Drivers and Responses. CWC Publishing, London 

1999: Making Waves Overseas, West LB, London 

1998: The European Water Industry: A country-by-country analysis 

Financial Times Energy, London 

1998: European Water Company Profiles 

Financial Times Energy, London 

vi 


PINSENT MASONS WATER SECTOR GROUP 

Pinsent Masons Water Sector Group 

Pinsent Masons LLP is a full service law firm with around 280 partners, a total legal team of 

around 1100 and more than 1600 staff in the UK and internationally. 

The firm’s Water Sector Group has extensive experience on a world-wide basis of water, 

wastewater, desalination, and industrial water reuse projects, many of them procured on a BOT 

basis or on a Public/Private Partnership basis, as well as of water resource management 

issues, and of corporate issues encountered by water utilities. 

Pinsent Masons Water Sector Group also has significant experience in the field of regulatory 

law issues relating to water. 

The Water Sector Group was recently awarded a Distinction by Global Water Intelligence in the 

Global Water Law Firm of the Year Category at the Global Water Awards in April 2008. 

The Water Sector Group regularly holds Wet Network events to promote the introduction of new 

technology into the global water sector. 

Examples of recent projects include the following: 

• advising one of the largest water treatment companies in the world and a blue-chip 

conglomerate in Hong Kong in respect of a foreign direct investment in a water treatment 

plant in Chongqing, People's Republic of China; 

• advising a bidder on its bid for the Riyadh Water Privatisation; 

• advising a bidder in connection with the Jeddah Water Privatisation; 

• acting for the concessionaire on its negotiations with the Government of Pakistan for a 

desalination concession project to be located in Karachi; 

• advising a major Singapore based contractor on risk allocation and contractual 

arrangements for various water process unit projects in Dubai, including Palm Jumeirah; 

• advising the Degremont/Besix joint venture in connection with the Jumeirah Golf Estates 

wastewater treatment plant concession; 

• advising United Utilities on procurement of an extension to their Mersey Valley site process 

treatment plant and de-watering facilities, including the addition of a new incinerator; 

• advising a member of the EPC construction consortium on its successful bid for the 

USD3.5billion Marafiq desalination project at Jubail, Saudi Arabia; 

• advising a member of the EPC construction consortium on its successful bid for the Ras 

Laffan C desalination project in Qatar; 

• advising an international operator in its bid for a water and electricity distribution operations 

and maintenance contract in Abu Dhabi; 

• advising in connection with the restructuring and refinancing of the Ajman wastewater 

concession project; 

• advising a bidder in connection with the USD200million Taweelah desalination project in 

Abu Dhabi; 

• advising United Utilities on their AX4 programme under which they are procuring all capital 

works for their water and electricity businesses from 2005 to 2010. This is one of the 

largest procurement programmes in the utilities industry: value GBP4billion; 

vii 



• advising a bidder on its bid for Project Aquatrine, the UK Ministry of Defence project to 

outsource its water and wastewater functions under the Private Finance Initiative; 

• advising on a major industrial water outsourcing project in the UK; 

• advising a UK Utility Group, part of the preferred bidder consortium, on the Engineering 

Procurement Construction contract issues (Package 1), in connection with the design, build 

and operation of a water treatment plant in Beijing. Beijing No. 10 is the fourth formal BOT 

project in China; 

• advising a member of a bidding consortium in connection with the Disi-Amman water 

conveyor BOT project in Jordan; 

• advising part of a consortium bidding for the Dublin Bay Ringsend Treatment Works 

wastewater project in Dublin; 

• acting for the Government of Sri Lanka on the Greater Negombo Water PSP project; 

• advising the South African Department of Water Affairs and Forestry on the form of model 

contracts to regulate water services for the benefit of South African municipalities; 

• acting for the preferred bidder in connection with the Levenmouth Wastewater Treatment 

project in Scotland. This is a bond financed project procured under the UK Government’s 

Private Finance Initiative; 

• advising administrators to a mineral water company on the transfer of abstraction licenses; 

• advising OFWAT on an appeal to the Competition Appeal Tribunal by Aqua Resources 

Limited; 

• advising PAI Partners on the UK aspects of their EUR1.7billion disposal of water company 

SAUR to a consortium led by Caisse des Depots. 

For further details of Pinsent Masons’ capabilities and experience in the water, wastewater, 

desalination and industrial water re-use sectors, and of the firm's capabilities and experience in 

the regulatory field, contact Mark Lane, Head of the Water Sector Group, at: 

Pinsent Masons 

30 Aylesbury Street 

London 

EC1R 0ER 

Tel: +44 (0)20 7490 4000 

DDI: +44 (0)20 7490 6214 

Mobile: +44 (0)7860 872533 

Fax: +44 (0)20 7490 2545 

Email: mark.lane@pinsentmasons.com 

Web: www.pinsentmasons.com 

viii 


CONTENTS 

CONTENTS 

Please click on page numbers for link to relevant section 

PREFACE 

DR DAVID LLOYD OWEN 


CONTENTS 

INTRODUCTION 

HOW TO USE THIS BOOK 

iii 

vi 

vii 

ix 

xv 

xviii 

PART 1: THE WORLD OF WATER 2008-09 1 

PART 2: COUNTRY ANALYSIS 55 

ARGENTINA 56 

AUSTRALIA 60 

BANGLADESH 66 

BELIZE 69 

BOLIVIA 70 

BRAZIL 73 

CAMBODIA 79 

CANADA 80 

CHILE 83 

CHINA 87 

COLUMBIA 101 

COSTA RICA 104 

CUBA 105 

ECUADOR 107 

INDIA 109 

INDONESIA 119 

JAPAN 124 

KAZAKHSTAN REPUBLIC 128 

MALAYSIA 131 

ix 


CONTENTS 

MEXICO 137 

MONGOLIA 142 

NEPAL 143 

NEW ZEALAND 144 

PAKISTAN 147 

REPUBLIC OF PANAMA 150 

PARAGUAY 151 

PERU 152 

PHILIPPINES 156 

SINGAPORE 162 

SOUTH KOREA 164 

SRI LANKA 167 

TAIWAN 169 

THAILAND 174 

TRINIDAD AND TOBEGO 177 

UNITED STATES OF AMERICA 178 

URUGUAY 186 

VENZUELA 188 

VIETNAM 191 

PART 3(i): COMPANY ANALYSIS: MAJOR PLAYERS 194 

SAUR 195 

SUEZ ENVIRONNEMENT SA 198 

VEOLIA ENVIRONNEMENT SA 220 

RWE AG 246 

ACEA 251 

AGUAS DE BARCELONA SA 256 

BIWATER PLC/CASCAL 262 

UNITED UTILITIES PLC 270 

PART 3(ii):COMPANY ANALYSIS: LOCAL/REGIONAL PLAYERS 276 

ARGENTINA: LATIN AGUAS/CHAMAS GROUP 277 

x 


CONTENTS 

AUSTRALIA: UNITED GROUP LIMITED 279 

BRAZIL: ANDRADE GUTIERREZ CONCESSOES 280 

BRAZIL: COMPANHIA DE SANEAMENTO DE MINAS GERAIS (COPASA) 281 

BRAZIL: GRUPO EQUIPAV SA 283 

BRAZIL: SABESP 284 

CANADA: AQUATECH WATER MANAGEMENT SEVICES INC 286 

CAYMAN ISLANDS: CONSOLIDATED WATER 287 

CHILE: AGUAS ANDINAS 289 

CHILE: AGUAS NUEVAS 292 

CHILE: ANTOFAGASTA PLC 293 

CHILE: ESSBIO 294 

CHILE: ESVAL 296 

CHILE: NUEVOSUR 297 

CHINA: ANHUI WATER RESOURCES DEVELOPMENT CO 298 

CHINA: BEIJING CAPITAL CO 299 

CHINA: BIO TREAT TECHNOLOGIES 302 

CHINA: CATHAY INTERNATIONAL GROUP 304 

CHINA: CHEUNG KONG INFRASTRUCTURE HOLDINGS LTD 305 

CHINA: CHINA EVERBRIGHT INTERNATIONAL 306 

CHINA: CHINA WATER GROUP 308 

CHINA: CHINA WATER AFFAIRS GROUP 309 

CHINA: CHINA WATER INDUSTRY GROUP 310 

CHINA: CITIC PACFIC LTD 312 

CHINA: EGUARD RESOURCES DEVELOPMENT CO LTD 313 

CHINA: GLOBAL GREEN TECH GROUP 314 

CHINA: GUANGDONG INVESTMENT LTD 315 

CHINA: GUOZHEN ENVIRONMANTAL PROTECTION 316 

CHINA: HONG KONG & CHINA GAS AND LIGHT 317 

CHINA: JIANGXI HONGCHENG WATERWORKS CO 318 

CHINA: NANHAI DEVELOPMENT COMPANY LIMITED 319 

xi 


CONTENTS 

CHINA: NINGBO FUDA COMPANY LIMITED 320 

CHINA: NWS HOLDINGS LTD 321 

CHINA: QIANJIANG WATER RESOURCES 323 

CHINA: SHANGHAI INDUSTRIAL HOLDINGS 324 

CHINA: SHANGHAI CHENGTOU HOLDING CO LTD 326 

CHINA: SHANGHAI URBAN CONSTRUCTION GROUP 327 

CHINA: SHANGHAI YOUNG SUN INVESTMENT CO LTD 328 

CHINA: SHENZHEN KONDARL (GROUP) CO LTD 329 

CHINA: SICHUAN GUANGAN AAA PUBLIC CO LTD 330 

CHINA: SUZHOU NEW DISTRICT HI-TECH INDUSTRIAL CO LTD 331 

CHINA: TIANJIN CAPITAL ENVIRONMENTAL PROTECTION 332 

CHINA: WUHAN SANZHEN INDUSTRY HOLDING CO LTD 334 

CHINA: CHINA WATER INDUSTRY INVESTMENT GROUP 335 

CHINA: XINJIANG CHANGYUAN WATER RESOURCES INDUSTRY GROUP CO LTD 336 

CHINA: XINJIANG URBAN CONSTRUCTION CO LTD 337 

INDIA: BHEL 338 

INDIA: IVRCL CONSTRUCTION AND PROJECTS LTD 339 

INDIA: JUSCO 340 

INDIA: LARSEN & TOUBRO 341 

JAPAN: MITSUI 342 

MALAYSIA: EMS ENERGY LTD 343 

MALAYSIA: GOLDIS 344 

MALAYSIA: INTAN UTILITIES BERHAD 345 

MALAYSIA: KUMPULAN PERANGSANG SELANGOR BERHAD 346 

MALAYSIA: PBA HOLDINGS BHD 347 

MALAYSIA: PPB GROUP BERHAD 348 

MALAYSIA: PUNCAK NIAGA BERHAD 349 

MALAYSIA: RANHILL BHD 351 

MALAYSIA: SALCON ENGINEERING BERHAD 353 

MALAYSIA: TALIWORKS CORPORATION 355 

xii 


CONTENTS 

MALAYSIA: YTL CORPORATION BHD 356 

MEXICO: AQUASOL 357 

PHILIPPINES: BENGUET CORPORATION 358 

PHILIPPINES: MANILA WATER CO 359 

PHILIPPINES: METRO PACIFIC INVESTMENTS 360 

SINGAPORE: ASIA ENVIRONMENT HOLDINGS LTD 361 

SINGAPORE: BOUSTEAD SINGAPORE LTD 364 

SINGAPORE: DARCO WATER TECHNOLOGIES PTE 365 

SINGAPORE: EPURE INTERNATIONAL LIMITED 367 

SINGAPORE: HYFLUX LTD 369 

SINGAPORE: SEMBCORP INDUSTRIES LTD 372 

THAILAND: THAI TAP 374 

THAILAND: EASTERN WATER RESOURCES DEVELOPMENT &MANAGEMENT PUBLIC CO 

375 

USA: AECOM 378 

USA: ALLIANCE WATER RESOURCES 381 

USA: AMERICAN WATER WORKS 382 

USA: AMERICAN STATES WATER 385 

USA: AQUA AMERICA INC 387 

USA: ARTESIAN RESOURCES CORPORATION 390 

USA: CADIZ INC 391 

USA: CALIFORNIA WATER SERVICE CO 392 

USA: CH2M HILL 394 

USA: CONNECTICUT WATER SERVICE COMPANY 395 

USA: COVANTA HOLDING CORP 397 

USA: HAN'S TECHNOLOGIES INC 398 

USA: GLOBAL WATER RESOURCES 399 

USA: MIDDLESEX WATER COMPANY 400 

USA: PENNICHUCK CORPORATION 402 

USA: PICO HOLDINGS INC 403 

xiii 


CONTENTS 

USA: PURE CYCLE CORP 405 

USA: SJW CORP 406 

USA: SOUTHWEST WATER COMPANY 407 

USA: TYCO INTERNATIONAL LTD 408 

USA: UTILITIES INC 411 

USA: WESTERN WATER 412 

USA: YORK WATER 413 

APPENDIX 1: THE WATER CYCLE AND WATER SERVICES 414 

APPENDIX 2: PRIVATE SECTOR PARTICIPATION 421 

APPENDIX 3: THE PRIVATE SECTOR AND THE MILLENNIUM DEVELOPMENT GOALS 

434 

APPENDIX 4: GLOSSARY OF WATER AND FINANCE TERMS AND ABBREVIATIONS 449 

APPENDIX 5: REFERENCES AND FURTHER READING 459 

xiv 


INTRODUCTION 

INTRODUCTION 

This is the 10 th edition of the Pinsent Masons Water Yearbook, and thanks to the onward march 

of new companies and contracts across the world, the tome continues to grow in substance, 

even after being split into its current bi-annual reporting cycle. This edition marks the completion 

of the second cycle of the ‘new series’ and has benefited from new information sources, 

especially for smaller companies, which throws more light on the emergence of local players, 

especially in India, East Asia and Latin America. 

Company changes 

13 new company entries have been made in this edition, four in China, four in the USA (one of 

which specialises in the Chinese market) and one each in Chile, India, the Philippines, Japan 

and Thailand. In addition, the seven name changes include two companies who have floated 

their shares on the market (Cascal and Epure International). 

The return of American Water Works has been most welcome, especially due to the improved 

information flow about the leading player in the USA. There is a glorious circularity about the 

partial divestment of Suez Environnement after the Suez – Gaz de France merger. La 

Lyonnaise became Lyonnaise Dumez in 1991 and Lyonnaise des Eaux again in 1993 only to be 

renamed Suez in 1997. The emphasis in the companies reporting since the flotation shows that 

Suez Environnement has made a return to its roots. The information provided by Thai Tap, 

Epure and Cascal has also been of great value. 

Nine companies have left, but in reality, this is eight as RUAS (acquired by Veolia) was bubbling 

under for a company entry. This time five companies have left from Asia, in three cases, due to 

IPOs (Manila Water and Thai Tap) or a partner company taking overall control of their interests 

(Maynilad Water), because of the sale of their water interests (Xinjiang Huitong) and in the case 

of Marubeni, because Berlinwasser International was never in fact acquired. 

16 companies are currently held by financial investors, one in France, two in the USA, five in 

Chile and eight in the UK, including three of the ten water & sewerage companies. This is a net 

increase of five since 2006, with one company (SmVaK of the Czech Republic) being sold by its 

private investor to a listed company (FCC of Spain), the first such exit noted to date. SAUR is 

set to follow in the medium term, as Séché Environnement (a French waste management 

company) has the option to buy out its financial partners at an appropriate date. For the 

believers in the highly geared private equity, interesting times lie ahead, especially when it 

comes to financing new capital obligations and realising one’s investment at a time of cheap 

equity and costly capital. 

Companies covered 

While the number of companies meriting a full entry has grown by 112% over the previous 

decade, the proportion of those from developing economies had surged from 12% to 35%. 

China, India and the Philippines have taken the lead here, with the number of countries 

contributing a company entry having increased from 13 to 28. 

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

Number of countries 13 15 16 15 18 22 28 27 27 28 

Number of companies 70 81 82 84 102 117 128 142 145 150 

- OECD countries 59 69 70 68 73 72 77 74 75 78 

- Advanced developing 2 2 2 2 6 13 13 18 19 20 

- Developing 9 10 10 14 23 32 38 50 51 52 

The size of the sector continues to grow 

In 1999, 5% of the world’s population was served to some extent by the private sector. Since 

2006, this had increased to 10% of the world’s population and to 11% in 2007 and 2008, with 

between 731 and 751million people served. As the sector grows (there were some 272 

xv 


INTRODUCTION 

contracts in 1999 against 935 in the current edition) the balance of growth moves away from 

Western companies with well staffed press offices to combing annual reports, conference 

presentations and sectoral studies. Thus a time lag of a year or more can emerge between a 

contract’s award and its being identified. 

A new set of forecasts looks to 2025 

Our revised forecast for the extent of PSP in 2015 is 1,161million, an upwards adjustment of 

13million on the forecast made in 2007. As a proportion of the forecast 2015 global population it 

remains steadily at 16%. It is gratifying to realise that in ten sets of forecasts, the proportion has 

remained within a 15-17% range. But 2015 is not as distant as it appeared back in 1999 so it is 

timely to introduce a new set of forecasts, that project PSP covering 1,538million people by 

2025, or 19% of the population. That may not appear to be wildly ambitious. 

And to grow more diverse 

The entire nature of the market has changed over the past half decade. While the ‘big two’ 

remain the clear market leaders, the perceived global domination of the former ‘big five’ is 

rapidly becoming a memory. As Agbar and SAUR develop more focussed strategies and RWE 

winds up its interests outside Germany and Central & Eastern Europe, the market share 

enjoyed by the ‘big five’ is set to slip from a peak of 73% reached in 2001 to 39% by the end of 

2008. Once RWE eases its holding in American Water Works below 50%, this will fall to a pro 

forma 37%. The ‘Big Five’ is becoming an increasingly fluid concept, as Suez takes control of 

Agbar and RWE continues to experience contractions. Perhaps a new member ought to come 

from one of the major companies in China and Brazil. 

The number of stable, long term international contracts held by Veolia Environnement and Suez 

Environnement has shown a steady rise since 2006. Meanwhile, the stated numbers served in 

France by Veolia and Suez have both been pared back since 1995, due to the elimination of 

double counting as jointly held contracts are prised apart. In addition, by the time the next 

edition comes round, we will have a proper idea about what the changes in Eau de Paris will 

mean for the companies. To what extent will the ending of the original contract be replaced by a 

plethora of outsourcing and other sub-contracts? 

Still a contentious sector to operate in 

Since 1997, contracts involving 64million people have ended, some 10% of all identified 

contracts, and it thus represents a high attrition rate. Encouragement is to be drawn from the 

stabilising of this attrition rate since 2006, but according to the World Bank, 29% of contracts (in 

terms of total investment) were either cancelled or in distress in 2006, compared with 4-9% for 

telecoms, electricity and transport, even if this represents an improvement from 37% in 2005. 

And one which needs to be taken seriously 

Water will never be a simple sector to operate in and communicating its complexities remains 

an urgent priority. Since 2006, there has been a dearth of new initiatives by the sector to provide 

serious, engaged research into their role. Working with UNCTAD on this year’s World 

Investment Report was sometimes an exercise in firefighting, as myths about the sector (just 

one million people connected by PSP since 1993 for example) have taken hold due to the 

absence of accessible evidence to the contrary. 

The grim progress being made towards the water and sanitation Millennium Development Goals 

especially in Sub-Saharan Africa and South Asia are a direct result of water and sanitation not 

being taken seriously by politicians, companies and civic society as a direct result of their being 

de-commodotised. Expecting the informal operators, such as water vendors to fill this gap is 

missing the point. They exist because there is nothing being provided by the incumbent utilities. 

They in effect exploit underinvestment by forcing the poor to pay more for an even poorer 

service. That people are willing to pay should not be a question – the challenge is to informal 

services within the formal sector to boost the level of people with adequate water and sanitation 

services at affordable prices. 

xvi 


INTRODUCTION 

Another concern is the impact of demographic change and climate change. According to 

Government projections in 2007, Britain may have a population of 87million in 2056 (high 

population growth scenario) while the Environment Agency in 2008 warned that summer river 

levels will be 30-50% lower by 2050. Developing and imposing water efficiency and 

management targets are as urgent and challenging as those being put forward in response to 

rising carbon emissions. 

America shuffles inwards again 

The sale and splitting up of Earth Tech’s water outsourcing activities marks the effective ending 

of companies in the USA operating in a number of countries globally. Another area of 

uncertainty lies in the future direction of GE, where concern has been expressed about the pace 

and profitability of the company’s move into the water utility, CleanTech and environmental 

services sectors. Niche companies such as Han’s Water continue to develop a contrary view. 

Multi utilities fade from sight but waste returns 

United Utilities in the UK is no longer an asset owning power provider and Suez Environnement 

has been eased away from the merger of Suez and Gaz de France. Amongst the major players, 

the multi utility strategy for the time being is becoming very much the exception rather than the 

norm it appeared to becoming a few years ago. Rather like water and waste management, 

water and power utility management have much in common on the surface, but deeper 

differences endure, especially when the regulatory climate moves on. And as the regulatory and 

market climate moves on again, so it is fascinating to see how water and waste management 

alliances are developing again as seen by Remondis in Germany, Séché in France and 

industrial wastewater outsourcing projects worldwide. 

Taking the Yearbook forward 

The task of assembling each edition of this Yearbook provides a mass of new insights into the 

market and its modus operandi. Each edition gets closer to its goal of providing a true and fair 

view about the markets and companies that serve them and this year has been productive in 

finding new players in India and China. The narrow range of market size estimates reflects the 

improved understanding about the size of the formal market. The author is responsible for any 

errors and omissions that may occur in this Yearbook. He is thus grateful for any feedback and 

suggestions so that future editions can rectify them and more closely reflect the needs of its 

readers. This feedback lay behind the splitting of the Yearbook into its current format in 2005. 

With the emergence of new contracts and companies, there may come a time when a three 

year cycle (Europe, the Middle East and Africa / Asia / the Americas?) might be needed. 

Dr David Lloyd Owen 

October 2008 

xvii 




The Pinsent Masons Water Yearbook is divided into four parts. Part 1, The World of Water takes a 

look at trends noted in water and wastewater services worldwide over the past 12 months and 

considers how these are set to evolve. Part 2 covers countries of interest in Asia and the Americas to 

those involved in providing water and wastewater services. Part 3 covers companies providing these 

services that are wholly or partly in the private sector; firstly the major international players and then 

companies based in Asia and the Americas. The Appendices make up the final part and provide 

background data about the sector, a Glossary of Terms and Abbreviations used in the Yearbook and a 

listing of the main references used. 

Country entries 

Population and economic data is given in order to provide an indication of demographic trends and the 

current state of economic development. The former outlines the size of the potential market, while the 

latter highlights affordability issues and spending priorities. The surface water and ground water data 

boxes outline how much water is available in each country on an annual basis, along with how much is 

currently being taken out. For groundwater, water availability relates to the annual natural recharge of 

water into water bearing rocks. For surface water, this refers to water that is in an abstractable form, 

entering rivers, streams and lakes whether through rainfall or rivers in neighbouring countries. 

Generally, any country that takes more than 25% of these renewable resources is likely to be facing at 

least regional water shortages. 

Two tables containing information about companies and contracts in each country aim to provide 

access to company entries. Where reference is made to specific data, it is mentioned in the country 

entry. Otherwise, a range of global and regional overviews have been used for compiling the common 

data entries. Details can be found in the References section in the Appendices. 

Company entries 

The country entries provide a description of how each company became involved in the sector and its 

overall strategies, when known. Wherever possible, a Profit & Loss account is provided along with 

contact data (company address, main switchboard, and web site, along with senior management) and 

details about water and wastewater services in their home and international markets. While the 

company contact details are as up to date as possible, the turnover in senior management seen in the 

sector means that sometimes names change between, for example, Annual Reports being published. 

In addition, wherever possible, international contracts are tabulated to show [1] year of contract award, 

[2] city/region, [3] contract type and duration and [4] population served and service provided. 

Appendices 

Three appendices provide an overview of the drivers affecting the water and wastewater service 

sectors, where the private sector fits in (or does not) and pertinent issues affecting the role and 

responsibilities of private sector players including risk management, assisting in meeting the 

Millennium Development Goals and joint initiatives. 

Glossary 

The water and wastewater sectors are not immune to jargon and acronyms, especially the TLA (triple 

letter acronym). The Glossary at the back of the Yearbook provides an explanation of those examples 

that are to be found in this book. As with definitions of contract types, definitions of certain terms can 

vary. In this book, we have kept with the most commonly accepted definitions and those that are most 

likely to be of relevance to potential readers. 

References 

As well as outlining the major studies that have provided the basis for the country data entries, the 

references are divided into thematic sections to provide a selection of the more pertinent publications 

about water and wastewater services and their political, social, environmental, economic and 

regulatory contexts. Web sites are not included in this section due to their transient nature, especially 

when it comes to accessing pages within a particular site, but this will be reviewed in future editions. 

xviii 


PART 1: THE WORLD OF WATER 2008-2009 

PART 1: THE WORLD OF WATER 2008-09 

1 



THE WORLD OF WATER 2008-09 

CORPORATE CHANGES, 2007-2009 

16 companies are currently held by financial investors, one in France, two in the USA, five in 

Chile and eight in the UK, including three of the ten water & sewerage companies. This is a net 

increase of five since 2006, with one company (SmVaK of the Czech Republic) being sold by its 

private investor to a listed company (FCC of Spain), the first such exit noted to date. SAUR is 

set to follow in the medium term, as Seche Environnement (a French waste management 

company) has the option to buy out its financial partners at an appropriate date. 

13 new company entries have been made in this edition, four in China, four in the USA (one of 

which specialises in the Chinese market) and one each in Chile, India, the Philippines, Japan 

and Thailand. In addition, the seven name changes include two companies who have floated 

their shares on the market (Cascal and Epure International). 

The return of American Water Works has been most welcome, especially due to the improved 

information flow about the leading player in the USA. There is a glorious circularity about the 

partial divestment of Suez Environnement after the Suez – Gaz de France merger. La 

Lyonnaise became Lyonnaise Dumez in 1991 and Lyonnaise des Eaux again in 1993 only to be 

renamed Suez in 1997. The emphasis in the companies reporting since the flotation shows that 

Suez Environnement has made a return to its roots. The information provided by Thai Tap, 

Epure and Cascal has also been significant. 

Nine companies have left, but in reality, this is eight as RUAS (acquired by Veolia) was bubbling 

under for a company entry. This time five companies have left from Asia, in three cases, due to 

IPOs (Manila Water and Thai Tap) or a partner company taking overall control of their interests 

(Maynilad Water), because of the sale of their water interests (Xinjiang Huitong) and in the case 

of Marubeni, because Berlinwasser International was never in fact acquired. 

Financial sector parent companies [1] 

Operating Company 

Utilities Inc (USA) 

South Staffs Water (UK) 

ESSCO (Chile) 

ESVAL (Chile) 

East Surrey Water (UK) 

Aquarion (USA) 

Thames Water (UK) 

AWG (UK) 

SAUR (France) 

Southern Water (UK) 

ESSEL (Chile) 

ESSBIO (Chile) 

ANSM (Chile) 

Portsmouth Water (UK) 

Mid Kent Water (UK) 

South East Water (UK) 

Private Equity / Bank 

AIG (USA) 

Alinda Infrastructure Fund (USA) 

Aguas Neuvas (Chile) 

Ontario Teachers Pension Plan (Canada) 

Deutsche Bank (Germany) 

Macquarie (Australia) 

Macquarie (Australia) 

Osprey Acquisitions (Canada) 

Seche Environement, CDC & AXA (France) 

JP Morgan (USA) 




South Downs (UK) 

Westpac (Australia) 

Westpac (Australia) 

Water operating subsidiaries 

Operating Company 

Aqualia (Spain) 

Bristol Water (UK) 

Cambridge Water (UK) 

Cascal (UK) 

Parent Company(s) 

FCC (Spain) 

FCC (Spain) 

Cheung Kong Holdings (China) 

Biwater (UK) 

2 



Earth Tech (USA) 

Earth Tech (USA) 

EMC (USA) 

Ondeo / Lyonnaise des Eaux 

SmVaK (Czech Republic) 

Veolia Water / Generale des Eaux 

Wessex Water (UK) 

Tyco International (USA) 

AECOM (USA) 

BOC (UK) / Linde (Germany) 

Suez Environnement (France) 

Aguas de Barcelona (Spain) 

Veolia Environnement (France) 

YTL Holdings (Malaysia) 

Major corporate changes since 2007 

New Entries 

AECOM (USA) 

American Water Works (USA) 

Bio Treat Technologies (China) 

China Water Affairs (China) 

China Water Industry (China) 

China Water Industry Investment (China) 

ESSBIO (Chile) 

Global Water Resources (USA) 

Han’s Technologies (USA) 

JUSCO (India) 

Metro Pacific (Philippines) 

Mitsui (Japan) 

Thai Tap (Thailand) 

Acquisition of Earth Tech from Tyco 

Partial IPO 

Identified as significant player 



Acquired water utility Xinjiang Huitong 

Sold by Thames Water / RWE 

Regulated water utility in Arizona 



Acquired majority of Maynilad Water 

Acquisition of Earth Tech’s Mexican contracts 

IPO 

Companies Removed 

Benpres (Philippines) 

BIW (USA) 

CK Karnchang (Thailand) 

DM Consunji (Philippines) 

Iberdrola (Spain) 

Marubeni (Japan) 

Meta Modena (Italy) 

RUAS (France) 

Xinjiang Huitong (China) 

IPO of Manila Water 

Sale of activities to Connecticut Water 

Thai Tap IPO 

Metro Pacific holds majority of Maynilad Water 

Sale of ESSAL to Aguas Andinas 

Non-acquisition of Berlinwasser International 

Acquired by Hera 

Acquired by Veolia Environnement 

Sale of water utility to CWIIG 

Name Changes 

Beijing Sound (China) 

Biwater (UK) 

China Evergreen Environmental (China) 

Consorcio Financiero (Chile) 

Eco Water (Malaysia) 

Shanghai Municipal Water (China) 

Suez (France) 

Epure International (Singapore) 

Cascal 

China Water Group 

ESVAL 

EMS Energy 

Shanghai Chengtou Holding 

Suez Environnement 

[1] Companies held by private equity houses and banks: As these are financial rather than 

operating holdings, these are typically classified under the operating company’s name and 

country. 

NUMBER OF PEOPLE SERVED BY COUNTRY AND COMPANY 

Developments during 2007-08 

After the dramatic setbacks noted in 2003 and 2004, with contracts being handed back and a 

cooler corporate attitude towards seeking contracts in developing economies, 2005 saw an 

upsurge in business in Europe and Asia, along with a more difficult operating climate in Latin 

3 



America and Sub-Saharan Africa. During 2006-07, this continued, with the end of the corporate 

clear out in Argentina and Bolivia and a continued resurgence of activity in Brazil and China. 

As in 2006, there was a boost to numbers for earlier years as information has filtered through 

about contracts awarded in 2006 and 2007, which is particularly important in China, where 

information tends to take some time to emerge. 

PSP contracts awarded by year (million people served) 

Water Sewerage Overall Number 

1987 7.00 1.50 7.00 2 

1988 0.54 0.00 0.54 1 

1989 [1] 40.47 52.25 40.47 13 

1990 0.00 0.00 0.00 0 

1991 0.74 4.27 4.54 4 

1992 2.26 1.56 3.05 6 

1993 16.34 8.00 22.54 14 

1994 15.42 3.94 15.82 27 

1995 14.23 4.27 14.44 25 

1996 41.02 22.33 41.74 32 

1997 38.73 7.95 42.42 42 

1998 19.79 9.81 21.38 31 

1999 42.88 27.13 48.02 75 

2000 35.44 21.43 42.72 72 

2001 24.34 26.44 40.80 58 

2002 15.20 10.83 23.46 43 

2003 32.91 22.75 43.70 79 

2004 34.13 23.35 52.12 115 

2005 38.45 35.34 65.98 109 

2006 32.29 20.73 44.26 76 

2007 27.96 14.69 38.52 65 

2008 [2] 12.18 15.88 22.56 46 

Total 492.32 334.45 636.08 935 

[1] Sewerage privatisations in England & Wales not added to the overall year total as these 

areas had been served for water by the Statutory Water Companies 

[2] To the end of September 

As shown on the following graph, when taking into account the one to two year lead effect of 

contracts filtering through, overall activity in terms of the number of PSP awards, the number of 

people being connected to new projects is continuing to advance at a steady rate. 

Graph: PSP awards – million people per year, 1987-2008 

4 



70.00 

60.00 

50.00 

40.00 

30.00 

Water 

Sewerage 

Overall 

20.00 

10.00 

0.00 

1987 

1988 

1989 

1990 

1991 

1992 

1993 

1994 

1995 

1996 

1997 

1998 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

2008 

Cumulative total of contract awards, 1987-08 

Water Sewerage Overall Number 

1987 7.00 1.50 7.00 2 

1988 7.54 1.50 7.54 3 

1989 [1] 48.01 53.75 48.01 16 

1990 48.01 53.75 48.01 16 

1991 48.75 58.02 52.55 20 

1992 51.01 59.58 55.60 26 

1993 67.35 67.58 78.14 40 

1994 82.77 71.52 93.96 67 

1995 97.00 75.79 108.40 92 

1996 138.02 98.12 150.14 124 

1997 176.75 106.07 192.56 166 

1998 196.54 115.88 213.94 197 

1999 239.42 143.01 261.96 272 

2000 274.86 164.44 304.68 344 

2001 299.20 190.88 345.48 402 

2002 314.40 201.71 368.94 445 

2003 347.31 224.46 412.64 524 

2004 381.44 247.81 464.76 639 

2005 419.89 283.15 530.74 748 

2006 452.18 303.88 575.00 824 

2007 480.14 318.57 613.52 889 

2008 [2] 492.32 334.45 636.08 935 

[1] Sewerage privatisations in England & Wales not added to the overall year total as these 

areas had been served for water by the Statutory Water Companies 

[2] To the end of September 

5 



At the time of writing, 935 contracts had been identified, which compared with 818 in 2007 

which was in turn a notable increase on the 548 contracts identified for the 2007 edition. It is 

increasingly evident that contracts in certain countries (especially in China) are not being 

identified for some time after their initial award, along with new data sources becoming 

available. The number of Singapore and Shanghai listed companies posting full annual reports 

and regulatory updates has made a material impression here. 

Frequency of contract awards, by year 

Water Wastewater Combined Contracts 

1987 1 0 1 2 

1988 1 0 0 1 

1989 3 0 10 13 

1990 0 0 0 0 

1991 2 1 1 4 

1992 2 1 3 6 

1993 6 5 3 14 

1994 11 6 10 27 

1995 13 2 10 25 

1996 13 5 14 32 

1997 21 5 16 42 

1998 13 5 13 31 

1999 23 12 40 75 

2000 25 13 34 72 

2001 15 15 28 58 

2002 10 12 21 43 

2003 30 24 25 79 

2004 47 42 26 115 

2005 48 41 20 109 

2006 28 37 11 76 

2007 29 29 7 65 

2008 14 25 7 46 

Total 355 280 300 935 

The increasing frequency of sewerage and sewage treatment contract awards since 1999 has 

been maintained. This has also been reflected by an increasing tendency for local companies to 

gain these contracts, which until 1995 were regarded as being almost exclusively the domain of 

companies operating in or from OECD economies. 

6 



Graph: Contract award by type (% - 1987-08) 

120% 

100% 

80% 

60% 


Wastewater 

Combined 

40% 

20% 

0% 

1987 

1988 

1989 

1990 

1991 

1992 

1993 

1994 

1995 

1996 

1997 

1998 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 


Average size of contract awards (millions of people) 

Water Wastewater Net 

1987 3.50 1.50 3.50 

1988 0.54 0.00 0.54 

1989 3.11 5.23 3.11 

1990 0.00 0.00 0.00 

1991 0.25 2.14 1.14 

1992 0.45 0.39 0.51 

1993 1.82 1.00 1.61 

1994 0.73 0.25 0.59 

1995 0.62 0.36 0.58 

1996 1.52 1.18 1.30 

1997 1.05 0.38 1.01 

1998 0.76 0.55 0.69 

1999 0.68 0.52 0.64 

2000 0.60 0.46 0.59 

2001 0.57 0.61 0.70 

2002 0.49 0.33 0.55 

2003 0.60 0.46 0.55 

2004 0.47 0.34 0.45 

2005 0.57 0.58 0.61 

2006 0.83 0.43 0.58 

2007 0.78 0.41 0.59 

2008 0.58 0.50 0.49 

Average 0.76 0.58 0.68 

7 



Graph: Average size of contract awards (millions of people) 

6.00 

5.00 

4.00 

3.00 


Wastewater 

Net 

2.00 

1.00 

0.00 

1987 

1988 

1989 

1990 

1991 

1992 

1993 

1994 

1995 

1996 

1997 

1998 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 


The volume of contracts remains high, underlining the development of local, small scale 

contract awards, especially for water. Wastewater only contracts continue to be scarcer, 

reflecting their lower perceived priority. Wastewater contracts tend to be smaller, due to a 

number of major bulk water contracts as well as sewerage services being less extensive than 

water provision services at the start of a typical privatisation. Even so, the gap has eased since 

1998. 

The average contract size has diminished since the 1990s, with the move away from megacontracts 

to more local and possibly less contentious contracts. 1993, 1996 and 1997 for 

example are now remembered for Buenos Aries, Manila and Jakarta respectively, which with 

the exception of Manila Water, have had their share of eventful moments. 

World Bank data - Where the money goes in the developing world 

The World Bank’s 2008 water & sanitation sector review covers all loans for contracts in all 

developing economies between 1990 and 2007. All the data in this section is adapted from this 

report. 

Overview of World Bank water & sewerage PSP lending, 1990 to 2007 

Number of countries with private participation 60 

Projects reaching financial closure 584 

Region with largest investment share East Asia (48%) 

Type of PPI with largest share in investment Concessions (68%) 

Type of PPI with largest share in projects Concessions (40%) 

Projects cancelled or under distress 

53 representing 29% of total investment 

The distress level of 29% compares poorly with Electricity (8%), Telecoms (4%) and Transport 

(8%). It is a marginal improvement from the 31% level in 2006. While the quality of the World 

Bank’s overall water and sewerage lending portfolio has improved in recent years (see the 

Appendices), problems in South East Asia and Latin America are reflected in the very high rate 

of funding covered by projects either cancelled or under distress. 

8 



Cancelled or under distress projects and investment by region (USDmillion) 

Region Projects Total Investment 

East Asia and Pacific 23 7,724 

Europe and Central Asia 2 8 

Latin America & Caribbean 24 8,632 

Middle East and North Africa 1 0 

Sub-Saharan Africa 3 9 

Total 53 16,373 

Number of projects by region and year of financial closure 

Financial 

closure 

East 

Asia & 

Pacific 

Europe 

& Cent 

Asia 

Latin 

America 

MENA 

South 

Asia 

Sub- 

Saharan 

Africa 

Total 

1990 0 0 0 0 0 0 0 

1991 0 0 1 0 0 1 2 

1992 1 0 3 1 0 1 2 

1993 3 1 6 0 0 1 6 

1994 4 0 10 0 0 0 11 

1995 4 3 10 0 0 1 18 

1996 5 2 15 1 0 1 24 

1997 14 3 22 0 0 0 39 

1998 13 2 16 0 0 1 32 

1999 8 6 21 2 1 5 38 

2000 13 6 18 0 1 1 39 

2001 13 4 16 0 0 4 40 

2002 20 4 17 1 0 2 44 

2003 26 9 7 1 1 1 44 

2004 29 5 18 0 1 0 53 

2005 43 6 6 4 0 1 61 

2006 42 9 3 1 0 2 57 

2007 44 3 4 4 5 2 62 

Total 282 61 193 15 9 24 584 

The number of projects invested in year by year has eased upwards, with a recent shift away 

from Latin America to East Asia and a constant level of activity for Eastern Europe and Central 

Asia. 

9 



Investment in projects by region and year of investment (USDmillion) 

Year of 

investment 

East 

Asia & 

Pacific 

Europe 

& Cent 

Asia 

Latin 

America 

MENA 

South 

Asia 

Sub- 

Saharan 

Africa 

Total 

1990 0 0 0 0 0 0 0 

1991 0 0 75 0 0 0 75 

1992 284 0 0 0 0 0 284 

1993 2,558 0 4,071 0 0 0 6,629 

1994 821 0 525 0 0 0 1,346 

1995 520 10 1,293 0 0 0 1,823 

1996 149 942 192 0 0 20 1,304 

1997 8,033 196 1,933 0 0 0 10,161 

1998 943 108 1,276 0 0 0 2,327 

1999 273 6 6,011 0 0 82 6,372 

2000 4,064 1,288 2,845 0 0 31 8,229 

2001 673 300 1,165 0 2 3 2,143 

2002 934 51 604 0 0 0 1,589 

2003 697 324 296 169 0 9 1,494 

2004 3,127 401 1,133 0 111 0 4,772 

2005 991 311 190 510 0 0 2,001 

2006 1,554 411 3,713 0 0 0 2,677 

2007 1,605 435 539 403 142 121 3,245 

Total 27,225 4,782 22,860 1,082 255 266 56,471 

In contrast to the number of projects, actual funding mobilised through these projects has not 

recovered to the levels disbursed between 1993 and 2000, although it has bounded back from 

the 2001-02 low. While there was a fairly steady level of activity in Latin America, which has 

recently tailed off, the most dramatic decline has been in East Asia where funds were mobilised 

for major projects in, for example, the Philippines and Malaysia. In China, the shift has been 

towards local and expatriate funding. 

Number of projects by type of private participation 

Financial 

closure year 

Concession Divestiture Greenfield 

project 

10 

Management 

& lease 

contract 

Total 

1990 0 0 0 0 0 

1991 1 0 0 1 2 

1992 2 0 2 2 6 

1993 6 0 3 2 11 

1994 8 0 5 1 14 

1995 9 1 3 5 18 

1996 7 1 9 17 24 

1997 16 2 9 12 39 

1998 18 1 11 2 32 

1999 13 7 8 13 38 

2000 28 1 5 5 39 

2001 12 1 13 14 40 

2002 22 3 8 9 44 

2003 12 1 21 10 44 

2004 27 0 21 5 53 

2005 18 0 32 11 61 

2006 15 2 27 13 57 

2007 20 5 30 7 62 

Total 236 25 207 116 584 



In terms of contracts awarded each year, numbers have been pretty steady since 1996. There 

has been an evident shift away from divestitures since the move in Chile away from outright 

privatisations to concessions from 2000, but they have not gone away as seen by the renewed 

activity in 2006-07. 

Investment in projects by type of private participation (USDmillion) 

Year of 

Investment 

Concession 

Divestiture 

Greenfield 

project 

Management & 

lease contract 

Total 

1991 75 0 0 0 75 

1992 284 0 0 0 284 

1993 6,465 0 164 0 6,629 

1994 966 0 380 0 1,346 

1995 1,563 20 228 13 1,823 

1996 122 36 1,125 20 1,304 

1997 9,164 499 333 166 10,161 

1998 1,676 266 385 0 2,327 

1999 1,684 4,313 347 27 6,372 

2000 7,134 456 633 7 8,229 

2001 1,138 51 937 17 2,143 

2002 1,032 448 232 1 1,589 

2003 804 47 554 92 1,494 

2004 3,341 210 1,041 180 4,772 

2005 697 0 974 331 2,001 

2006 1,162 383 405 737 2,667 

2007 1,323 409 1,422 2 3,245 

Total 37,301 7,099 9,161 1,593 56,471 

Greenfield projects are less contentious than many as they do not directly affect people living 

there at the time. They are designed to serve companies seeking to operate in a newly 

designated zone and housing for staff attracted to these companies. The divestiture segment 

has been dominated by Chile, and has had a peripheral impact in recent years, with funding 

flows stemming from contracts awarded by 2000. Likewise, management and lease contracts 

are chiefly concerned with mobilising capabilities rather than funding. 

Number of projects by region and type 

Region Concession Divestiture 

Greenfield 

project 

Management & 


Total 

East Asia and Pacific 116 8 146 12 282 

Europe and Central Asia 8 5 7 41 61 

Latin America 109 12 42 30 193 

M East & North Africa 0 0 6 9 15 

South Asia 1 0 4 4 9 

Sub-Saharan Africa 2 0 2 20 24 

Grand Total 236 25 207 116 584 

Management type contracts have been most popular in Sub-Saharan Africa, chiefly because of 

the difficulties in attracting full project funding there. In Europe and Central Asia, the 

management and lease contract is operated separately from funding, typically directed towards 

rehabilitating infrastructure. Concession and Greenfield contracts have been focussed on East 

Asia and Latin America, especially the major cities. 

11 



Investment in projects by region and type (USDmillion) 

Region Concession Divestiture 

Greenfield 

project 

Management & 


Total 

East Asia and Pacific 22,393 270 4,011 551 27,225 

Europe and Central Asia 1,531 448 1,825 978 4,782 

Latin America 14,610 6,381 1,865 4 22,860 

M East & North Africa 0 0 1,082 0 1,082 

South Asia 9 0 245 2 255 

Sub-Saharan Africa 76 0 133 57 266 

Total 38,618 7,099 9,161 1,593 56,471 

The lack of funding for projects in Sub-Saharan Africa and South Asia is telling. These are the 

two regions which are currently set to fail to reach the Millennium Development Goals. 

Sewerage and sewage treatment projects remain the least popular, partly due to the problems 

of gaining public support for projects where the benefits for extra costs cannot be directly 

discerned as with water provision projects. 

Funding by sectoral activity 

Subsector 

Segment 

Project 

Count 

Total 

Investment 

Treatment plant Potable water & sewerage treatment plant 12 292 

Potable water treatment plant 120 8,113 

Sewerage treatment plant 163 3,945 

Total Treatment plant 295 12,350 

Utility Sewerage collection 1 43 

Sewerage collection and treatment 9 2,726 

Water utility with sewerage 215 31,326 

Water utility without sewerage 64 10,026 

Total Utility 289 41,121 

Grand Total 584 56,471 

Water and sewerage projects dominate in terms of funding mobilised because of a series of 

major projects in Asia and Latin America such as Buenos Aries and Manila which were intended 

to cover the comprehensive rehabilitation and extension of a major city’s water and sewerage 

services. 

Contract awards, 2005-08 

The table below summarises all contract awards identified by the author which have been 

awarded between the start of 2005 and mid October 2008. The list excludes contract awards 

that serve industrial clients alone. 


(million 

people) 

Sewerage 

(million 

people) 

Year Country Contract Country 

2005 Algeria Oran Abengoa 0.400 0.000 

2005 Algeria Skikda Abengoa 1.000 0.000 

2005 Algeria Algiers GE 1.100 0.000 

2005 Algeria Athmania Suez Environnement 1.000 0.000 

2005 Algeria Taksebt Suez Environnement 2.000 0.000 

2005 Algeria Algiers Suez Environnement 3.500 3.500 

12 



2005 Argentina Aguas de Tumbes Latin Aguas 0.157 0.095 

2005 Armenia Yerevan Veolia Environnement 1.200 1.200 

2005 Australia Perth Suez Environnement 0.250 0.000 

2005 Austria Gerasdorf EVN 0.011 0.000 

2005 Chile Antofagasta OHL 0.000 0.000 

2005 China Pizhou, Jiangsu AEH 0.250 0.000 

2005 China Shenzen, Guangdong Anhui Guozhen 0.000 0.500 

2005 China Hanxi Asia Water Technology 0.000 0.600 

2005 China Wuhan, Hubei Asia Water Technology 0.000 1.333 

2005 China Tianmen Asia Water Technology 0.300 0.000 

2005 China Huaiyuan, Anhui Asia Water Technology 1.250 0.000 

2005 China Qingdao Beijing Capital 0.250 0.000 

2005 China Huainan Beijing Capital 0.550 0.000 

2005 China Qinhuangdao, Hebei Beijing Capital 0.720 0.000 

2005 China Xuzhou, Jiangsu Beijing Capital 1.200 0.000 

2005 China Nanjing, Jiangsu Bio Treat Technology 0.000 0.200 

2005 China Suqian, Jiangsu Bio Treat Technology 0.000 0.300 

2005 China Lianyunguang, Jiangsu Bio Treat Technology 0.000 0.400 

2005 China Lianyunguang, Jiangsu Bio Treat Technology 0.000 0.500 

2005 China Jiangdu, Jiangsu Bio Treat Technology 0.250 0.000 

2005 China Tianjin Boustead 0.100 0.000 

2005 China Hai Yang, Shandong China Evergreen 0.000 0.080 

2005 China Fenyi, Jiangxi China Water Affairs 0.350 0.000 

2005 China Qianshan, Jiangxi China Water Affairs 0.350 0.000 

2005 China Wannian, Jiangxi China Water Affairs 0.350 0.000 

2005 China Xinyu, Jiangxi China Water Affairs 0.350 0.000 

2005 China Beijing Chongqing Kanda Env 0.000 0.033 

2005 China Nangong, Hebei CNA Group 0.000 0.100 

2005 China Anshan, Liaoning Dalian Dongda Env Eng 0.000 0.333 

2005 China Nanchang, Jiangxi Eguard 0.000 0.667 

2005 China Huzhou, Zhejiang Eguard 0.600 0.000 

2005 China Bengbu, Anhui FCC 0.000 2.000 

2005 China Daxing, Beijing Golden State Env 0.000 0.083 

2005 China Fenghua, Zheijiang Golden State Env 0.000 0.200 

2005 China Kushan Golden State Env 0.000 0.293 

2005 China Tie Ling Goldis 0.200 0.400 

2005 China Shenzen, Guangdong Guozhen Env Protn 0.000 0.600 

2005 China Xitang, Zhejiang Han's Technologies 0.000 0.100 

2005 China Hezhang, Guizhou Han's Technologies 0.050 0.000 

2005 China Dafang, Zhejiang Han's Technologies 0.080 0.000 

2005 China Zhuozhou, Hebei Interchina Holdings 0.000 0.247 

2005 China Shanghai Interchina Holdings 0.000 5.667 

2005 China Changyi, Shandong Jinan Shifangyuantong 0.000 0.100 

2005 China Yuyao Ningbo Fuda 0.400 0.000 

2005 China Qianjiang Qianjiang Water Res 0.315 0.000 

2005 China Cao, Shandong Qingdao Galaxy 0.000 0.100 

2005 China Shan City, Shandong Qingdao Galaxy 0.000 0.133 

2005 China Kunming, Yunnan Salcon 0.120 0.000 

2005 China Linyi, Shandong Salcon 1.000 0.000 

2005 China Wenzhou, Zheijiang Shanghai Industrial 0.000 0.500 

2005 China Xianyang Shanghai Industrial 0.350 0.000 

2005 China Shanghai Shanghai Urban Const 0.000 2.000 

13 



2005 China Shanghai Shanghai Young Sun 0.000 0.500 

2005 China Sichuan Sichuan Guangan AAA 0.100 0.000 

2005 China Baoying Tianjin Env Protection 0.000 0.250 

2005 China Hangzhou Tianjin Env Protection 0.000 2.000 

2005 China Honghu Tianjin Env Protection 0.350 0.350 

2005 China Qujing Tianjin Env Protection 0.750 0.750 

2005 China Wujiang Towngas 0.780 0.000 

2005 China Wuhu, Anhui Towngas 1.100 0.000 

2005 China Xintai, Shandong United Envirotech 0.000 0.267 

2005 China Urumqi, Xinjiang VE / Beijing Capital 0.000 1.140 

2005 China Handan, Hebei Veolia Environnement 0.000 0.800 

2005 China Changzhou, Jiangsu Veolia Environnement 1.200 0.000 

2005 China Kunming, Yunnan Veolia Environnement 3.500 0.000 

2005 China Wuxi, Jiangsu Wai Kee Holdings 0.000 0.067 

2005 China Tangshan, Hebei Xucheng Industrial Dev 0.000 0.133 

2005 China Korla, Xinjiang China Water Industry Group 0.300 0.000 

2005 Colombia Barranquila Consultores de Desarrollo N/A N/A 

2005 Colombia Sabanagrande Tecvasa 0.070 0.060 

2005 Colombia San Andres Island VE / FCC - Pro Activa 0.015 0.015 

2005 Croatia Vodice EVN 0.000 0.010 

2005 Czech Rep. Hodonin Aquaplus 0.070 0.070 

2005 Czech Rep. Kolln Energie 0.051 0.051 

2005 Czech Rep. Chrudim Energie 0.080 0.080 

2005 Czech Rep. Hradec Karlove Veolia Environnement 0.150 0.150 

2005 Egypt Cairo El Asfar Suez Environnement 0.000 3.000 

2005 Germany Braunschweig Veolia Environnement 0.000 0.250 

2005 Ghana Ghana Vitens N/A N/A 

2005 India Chennai IVRCL 1.000 0.000 

2005 Ireland Fringal County Earth Tech (Tyco) 0.000 0.030 

2005 Italy Sarnese ACEA 0.700 0.700 

2005 Malaysia Negeri Sembilan Salcon 0.100 0.000 

2005 Morocco Marrakech Suez Environnement 0.000 1.000 

2005 Peru Tumbles & Zarumilla Latin Aguas 0.120 0.100 

2005 Philippines Baguio Benguet 0.250 0.000 

2005 Portugal Vila do Conde Mota-Engil 0.078 0.078 

2005 Portugal Matosinhos Mota-Engil 0.167 0.167 

2005 Portugal Covilha Sacyr 0.054 0.054 

2005 Portugal Canaveses Sacyr 0.055 0.055 

2005 Portugal Faro Sacyr 0.061 0.061 

2005 Portugal Penafiel Sacyr 0.075 0.075 

2005 Qatar Doha Suez / Marubeni 0.000 0.500 

2005 Russia Rostov on Don Eurasian Water Partnership 1.100 0.000 

2005 Russia Petrozavodsk Russian Utility Systems 0.260 0.000 

2005 Russia St Petersburg Veolia Environnement 2.000 0.000 

2005 Singapore Ulu Pandan Keppel 0.700 0.000 

2005 Sudan Khartoum Biwater 2.500 0.000 

2005 Taiwan Hsin Chu Darco 0.000 0.150 

2005 Thailand Koh Samui East Water 0.010 0.000 

2005 UK Northern Ireland (Alpha) Kelda / Earth Tech 0.700 0.000 

2005 USA Gresham, Oregon Veolia Environnement 0.000 0.160 

2006 Algeria Beni Saf Abengoa 0.400 0.000 

2006 Australia Pimpama Suez Environnement 0.000 0.075 

14 



2006 Australia Ballarat Veolia Environnement 0.000 0.115 

2006 Australia Gold Coast Veolia Environnement 0.450 0.000 

2006 Brazil Minas Gerais COPASA 12.000 6.200 

2006 Canada Brockton Veolia Environnement 0.010 0.010 

2006 China Zhangzhu, Jiangzu AEH 0.000 0.100 

2006 China Changzhou Asia Environment 0.000 0.025 

2006 China Yixing, Jiangsu Asia Environment 0.000 0.033 

2006 China Fengtai, Anhui Asia Environment 0.100 0.000 

2006 China Lu Liang, Shanxi Asia Water Technology 0.080 0.000 

2006 China Linyi, Shandong Beijing Capital 0.000 0.600 

2006 China Beijing Bio Treat Technology 0.000 0.200 

2006 China Wuhan Bio Treat Technology 0.000 0.500 

2006 China Suzhou, Jiangsu Bio Treat Technology 0.000 2.000 

2006 China Jinan 1, Shandong China Everbright International 0.000 1.000 

2006 China Handan, Hebei China Evergreen 0.000 0.150 

2006 China Fenyi, Jiangxi China Water Affairs 0.000 0.200 

2006 China Jingzhou, Hubei China Water Affairs 0.000 0.200 

2006 China Fugou, Henan China Water Affairs 0.350 0.000 

2006 China Haikou, Hainan China Water Affairs 0.350 0.000 

2006 China Jingling, Hubei China Water Affairs 0.350 0.000 

2006 China Wujin, Jiangsu China Water Affairs 0.350 0.000 

2006 China Xihua, Henan China Water Affairs 0.350 0.000 

2006 China Xinhui, Guangdong China Water Affairs 0.350 0.000 

2006 China Zhoukou, Henan China Water Affairs 0.350 0.000 

2006 China Yongchuan, Chongqing China Water Affairs 0.600 0.000 

2006 China Linyi, Shandong Chongqing Kanda Env 0.000 0.267 

2006 China Shangqiu, Henan Chongqing Kanda Env 0.000 0.267 

2006 China Suzhou, Anhui Chongqing Kanda Env 0.000 0.267 

2006 China Jiaozuo, Henan Chongqing Kanda Env 0.000 0.333 

2006 China Jiaozuo, Henan Chongqing Kanda Env 0.000 0.500 

2006 China Nin Jin, Shandong CNA Group 0.000 0.100 

2006 China Deging, Zhejiang Darco 0.200 0.000 

2006 China Tongliao Eguard 0.000 0.333 

2006 China Xiangfan, Hubei Epure 0.000 0.333 

2006 China Baotou, Inner Mongolia Epure 0.000 0.500 

2006 China Ganyu, Gansu Goldis 0.000 0.100 

2006 China Liaoyang, Liaoning Hyflux 0.000 0.100 

2006 China Tianchang, Anhui Long Quan Group 0.200 0.000 

2006 China Shandong Province Salcon 0.000 0.600 

2006 China Xiuning, Anhui Shanghai Fudalefumen 0.000 0.133 

2006 China Dengzhou, Henan Sinomem 0.000 0.100 

2006 China Ji An City Sinomem 0.000 0.400 

2006 China Chongqing Suez Environnement 0.000 1.000 

2006 China Changshu, Jiangsu Suez Environnement 1.500 0.000 

2006 China Baoji, Shaanxi Veolia Environnement 0.000 0.167 

2006 China Liuzhou, Guangxi Veolia Environnement 1.000 0.000 

2006 China Wendeng, Shandong Weihai Dean Water Eng 0.020 0.000 

2006 China Jixiang, Shandong China Water Industry Group 0.700 0.000 

2006 China Jinan, Shandong China Water Industry Group 2.600 0.000 

2006 Colombia Cucuta Aguas Kpital 0.500 0.400 

2006 Czech Rep. Slany Veolia Environnement 0.021 0.021 

2006 Czech Rep. Prostejov Veolia Environnement 0.070 0.070 

15 



2006 Denmark Allerod Veolia Environnement 0.000 0.023 

2006 Hungary Erd Veolia Environnement 0.100 0.100 

2006 Ireland Limerick Veolia Environnement 0.000 0.090 

2006 Italy Caltanissetta FCC 0.275 0.275 

2006 Oman Barka Suez Environnement 0.500 0.000 

2006 Oman Muscat Veolia Environnement 0.000 0.700 

2006 Philippines Maynilad Water Metro Pacific 5.900 0.500 

2006 Poland Wozniky Veolia Environnement 0.010 0.000 

2006 Portugal Leziria do Tejo Aqualia (FCC) 0.240 0.240 

2006 Qatar Lusail Suez / Marubeni 0.000 0.200 

2006 Russia Krasnodar Alfa Group 0.710 0.000 

2006 Russia Tyuman Alfa Group N/A N/A 

2006 Russia Kranokamsk Russian Utility Systems 0.053 N/A 

2006 Slovakia Popgrad Veolia Environnement 0.290 0.290 

2006 Slovakia Banska Bystrica Veolia Environnement 0.660 0.660 

2006 Slovenia Lasko EVN 0.000 0.005 

2006 Slovenia Bled EVN 0.000 0.016 

2006 South Africa Maluti-a-Phofung Amanz' aBantu / Uzinzo 0.300 0.000 

2006 Thailand Si Chang East Water 0.010 0.000 

2006 Thailand Jaopraya East Water 0.045 0.000 

2006 UAE Ajman Veolia Environnement 0.000 0.235 

2007 Algeria Oran Agbar 1.500 0.000 

2007 Australia Sydney Veolia Environnement 0.500 0.000 

2007 Brazil Belford Roxo Gupo Equipav 0.400 0.300 

2007 Brazil Rio das Ostras Obrecht Engenharia 0.000 0.035 

2007 China Lishui, Jiangsu AEH 0.000 0.100 

2007 China Jingezhen, Jiangxi AEH 0.000 0.250 

2007 China Xinning, Qinghai AEH 0.000 0.350 

2007 China Wangcheng, Hunan AEH 0.125 0.000 

2007 China Nanjing, Jiangsu Agbar / Golden State Water 0.000 1.250 

2007 China Xuyi Agbar / Golden State Water 0.250 0.000 

2007 China Taizhou Agbar / Golden State Water 1.000 0.000 

2007 China Binzhou, Shandong Bio Treat Technology 0.000 0.200 

2007 China Zibo, Shandong China Everbright International 0.000 0.450 

2007 China Daya Bay China Water Affairs 0.000 0.400 

2007 China Jingzhou, Hubei China Water Affairs 0.200 0.000 

2007 China Daya Bay, Huizhou China Water Affairs 0.350 0.000 

2007 China Gaoan, Jiangxi China Water Affairs 0.350 0.000 

2007 China Wuhu Guozhen Env Protn 0.000 0.500 

2007 China Minguan, Anhui Hyflux 0.000 0.150 

2007 China Mancheng, Hebei Hyflux 0.000 0.250 

2007 China Xiajin, Shandong Hyflux 0.200 0.000 

2007 China Wuxi, Jiangsu Hyflux Water Trust 0.000 0.050 

2007 China Yangkou Rudong Hyflux Water Trust 0.000 0.067 

2007 China Guanyun, Jiangsu Hyflux Water Trust 0.000 0.100 

2007 China Tantai, Zhejiang Hyflux Water Trust 0.000 0.100 

2007 China Langfang, Hebei Hyflux Water Trust 0.000 0.403 

2007 China Xeucheng, Shandong Hyflux Water Trust 0.125 0.000 

2007 China Guanyun, Jiangsu Hyflux Water Trust 0.200 0.000 

2007 China Changli Interchina Holdings 0.000 0.467 

2007 China Siping, Jilin Sinomem 0.000 0.200 

2007 China Haikou, Hainan Veolia Environnement 0.800 0.800 

16 



2007 China Tianjin Veolia Environnement 3.000 0.000 

2007 China Lanzhou, Gansu Veolia Environnement 3.200 0.000 

2007 China Suzhou, Anhui China Water Industry Group 0.000 0.000 

2007 China Duyun, Guizhou China Water Industry Group 0.200 0.000 

2007 China Danzhou, Hainan China Water Industry Group 0.230 0.000 

2007 China Shangqiu, Henan China Water Industry Group 2.000 0.000 

2007 China Linyi, Shandong China Water Industry Group 3.000 3.000 

2007 Egypt Cairo El Asfar Suez Environnement 0.000 1.500 

2007 Georgia Tbilisi Multiplex Solutions 1.050 0.000 

2007 Germany Burghausen Energie 0.015 0.000 

2007 India Jamshedpur JUSCO 0.050 0.000 

2007 India Haldia JUSCO 0.250 0.000 

2007 India Chennai Suez Environnement 4.000 0.000 

2007 India Nagpur, Maharashtra Veolia Environnement 0.100 0.000 

2007 Indonesia Bangka Island Darco 0.150 0.000 

2007 Mexico Querétaro FCC 0.700 0.000 

2007 Mexico Querétaro Mitsui 0.000 0.500 

2007 Oman Sur Veolia Environnement 0.350 0.000 

2007 Poland Toszek Remondis Aqua 0.010 0.010 

2007 Portugal Abrantes Aqualia (FCC) 0.000 0.040 

2007 Portugal Campo Major Aqualia (FCC) 0.020 0.020 

2007 Saudi Arabia Jubail Suez Environnement 3.500 0.000 

2007 Turkey Istanbul EVN 0.000 2.000 

2007 UAE Dubai Suez Environnement 0.000 0.000 

2007 UAE Abu Dhabi & Al Ain Veolia Environnement 0.000 1.200 

2007 UAE Fujairah Veolia Environnement 0.130 0.000 

2008 Australia Townsville, Queensland United Utilities Australia 0.000 0.000 

2008 Chile Santiago Cascal 0.100 0.000 

2008 China Danyang, Jiangsu AEH 0.500 0.000 

2008 China Hewenhu, Jiangxi Beijing Capital 0.500 0.500 

2008 China Dongying, Shandong Beijing Capital 0.650 0.650 

2008 China Foshan, Guangdong Bio Treat Technology 0.000 0.250 

2008 China Xuancheng, Anhui Bio Treat Technology 0.000 0.250 

2008 China Zhumadian, Henan Cascal 0.400 0.000 

2008 China Yancheng, Jiangsu Cascal 0.600 0.000 

2008 China Boxing, Shandong China Everbright International 0.000 0.300 

2008 China Jiangyin China Everbright International 0.000 1.000 

2008 China Jinan 2, Shandong China Everbright International 0.000 2.000 

2008 China Yiliang, Yunnan Han's Technologies 0.000 0.100 

2008 China Ninghua, Fujian Han's Technologies 0.000 0.150 

2008 China Lishui Qianjiang Water Res 1.000 0.000 

2008 China Nan An, Fujian Salcon 1.000 0.000 

2008 China Shenzhen Shanghai Industrial 0.000 1.500 

2008 China Yuanping, Shanxi Sino-Dutch Water Investment 0.100 0.250 

2008 China Chongqing Suez Environnement 1.200 0.000 

2008 China Xian, Shaanxi Tianjin Env Protection 0.000 1.000 

2008 China Yunan County China Water Industry Group 0.000 0.100 

2008 China Yunan County China Water Industry Group 0.000 0.100 

2008 China Boluo, Shenzhen China Water Industry Group 0.000 0.150 

2008 China Huizhou No 4 China Water Industry Group 0.000 0.150 

2008 China Huizhou No 6 China Water Industry Group 0.000 0.150 

2008 China Sihui Urban, Shenzhen China Water Industry Group 0.000 0.150 

17 



2008 China Huidong, Shenzhen China Water Industry Group 0.000 0.200 

2008 China Sihui, Shenzhen China Water Industry Group 0.000 0.250 

2008 China Baoji, Shenzhen China Water Industry Group 0.000 0.500 

2008 China Geermu China Water Industry Group 0.200 0.000 

2008 China Yunfu City, Guangdong China Water Industry Group 0.200 0.300 

2008 China Shenyang City China Water Industry Group 0.250 0.000 

2008 China Tangshan, Shenzhen China Water Industry Group 0.350 0.000 

2008 China Shenzhen China Water Industry Group 1.000 2.000 

2008 India Kolkata JUSCO 0.030 0.030 

2008 India Delhi Suez Environnement 0.000 0.600 

2008 India Nagpur, Maharashtra Veolia Environnement 0.650 0.000 

2008 Indonesia Telang Kelapa Cascal 0.030 0.000 

2008 Ireland Mullingar Veolia Environnement 0.000 0.030 

2008 Mauritius Mauritius Berlinwasser International 0.000 0.200 

2008 Portugal Elvas Aqualia (FCC) 0.023 0.023 

2008 Saudi Arabia Jeddah Suez Environnement 3.000 3.000 

2008 Singapore Changi SembCorp 0.400 0.000 

Contract losses 

This is an attempt to outline all PSP awards that have been rescinded for whatever reason in 

recent years. Despite the excitable rhetoric of the anti-private sector lobbies, these contracts 

may end for quite prosaic reasons. 

Contracts ended unilaterally 

Start End Country Contract Company Water WW 

1995 1997 Argentina Tucuman Veolia Environnement 1.200 0.000 

1996 1999 Trinidad Trinidad & Tobago Severn Trent 0.400 0.000 

1999 2000 Bolivia Cochabamba Bechtel 0.558 0.000 

1997 2001 Venezuela Monagas Veolia Environnement 0.552 0.000 

1999 2002 Argentina Buenos Aries Enron 2.500 0.000 

1999 2002 Venezuela Lara Agval 1.100 0.000 

2001 2003 Viethnam Ho Chi Minh Suez 1.000 0.000 

1997 2004 Colombia Bogota Suez 0.000 1.500 

2002 2004 Colombia Sabanagrande Acuasasa 0.027 0.025 

2001 2004 Venezuela Zulia Tecvasa 3.500 0.000 

2004 2005 Russia Volgograd Russian Utility Systems 1.013 0.000 

2003 2005 Tanzania Dar es Salaam Biwater 0.750 0.000 

2000 2005 Uruguay Maldonado Iberdrola 0.260 0.260 

1997 2007 Bolivia La Paz & El Alto Suez 1.400 1.000 

2003 2007 Russia Tomsk Russian Utility Systems 0.488 0.000 

In the cases of Tanzania and Bolivia, the contracts ended due to political pressures. Suez 

handed back the Puerto Rico contract (which has previously been handed back by VE) after 

being unable to renegotiate its terms and the Bogota wastewater treatment works contract was 

pulled in circumstances that still remain unclear. In the US, the Allete-held utility was acquired 

by the municipality under ‘eminent domain’, whereby a municipality is allowed to buy a private 

sector utility irrespective of its performance. The Atlanta and Halifax contracts in the US and 

Canada were cancelled primarily due to political change and disputes about performance 

delivery. In the case of Halifax, a new contract was subsequently awarded to Suez. 

18 



Contracts ended by negotiation 


1994 2000 China Shenyang, Liaoning Suez 1.400 0.000 

1993 2000 Malaysia National - Sewerage Indah 0.000 6.100 

1991 2001 C African Rep Bangui SAUR 0.075 0.000 

1995 2001 South Africa Nkokobe Suez 0.128 0.000 

1999 2002 Argentina Aguas de La Rioja Latin Aguas 0.201 0.122 

1997 2002 China Binzhou, Shandong Cathay International 0.250 0.000 

1997 2002 China Jinan, Shandong Cathay International 2.550 0.000 

1998 2002 China Binzhou, Shandong Cathay International 0.100 0.000 

1998 2002 China Jinan, Shandong Cathay International 1.800 0.000 

1999 2002 Philippines Magdalena Laguna Benpres 0.010 0.000 

1999 2002 Turkey ANTSU Suez 0.535 0.535 

1996 2003 Brazil Itu, Sao Paulo Carmargo Correa 0.000 0.110 

1995 2003 China Shanghai RWE 1.300 0.000 

1997 2003 China Xian Berlinwasser 3.000 0.000 

2003 2003 China Nanchang, Jiangxi Berlinwasser 1.000 0.000 

1994 2004 Brazil Sao Carlos Hidrogesp 0.025 0.000 

1992 2004 Mexico Toluca Mexico de Desarrollo 0.000 0.647 

1994 2004 Mexico Puerto Vallarta Cascal 0.000 0.250 

1991 2005 Belgium Flanders Aquafin 0.000 3.800 

2001 2005 Belize Belize Biwater 0.100 0.000 

1992 2005 Mexico Chihuahua Atlatec 0.000 0.750 

1996 2005 Mexico Navojoa Tribasa 0.100 0.000 

1999 2005 Mexico Peubla Suez 0.000 0.200 

1997 2005 Philippines Maynilad Water Suez 4.500 0.700 

2003 2005 Philippines Mindanao Benguet 0.027 0.000 

1993 2006 Argentina Buenos Aries Suez 7.700 6.000 

1995 2006 Argentina Santa Fe Suez 1.800 0.000 

1998 2006 Argentina Mendoza SAUR 1.140 0.950 

2000 2006 Argentina Aguas de G BA Grupo ACS 1.700 0.000 

2000 2006 Argentina Catamarca PA (FCC / VE) 0.200 0.000 

1996 2006 China Shenyang, Liaoning China Water Company 0.740 0.000 

1998 2006 China Shaoxing, Zhejiang China Water Company 0.800 0.000 

2001 2006 China Shanghai SAUR 0.700 0.000 

2000 2006 China Cgangchun, Jilin China Water Company 0.000 2.500 

2004 2006 China Xianyang, Shaanxi Interchina Holdings 0.750 0.000 

2005 2006 China Zhuozhou, Hebei Interchina Holdings 0.000 0.247 

2004 2006 Mexico Xalapa Earth Tech (Tyco) 0.400 0.400 

Negotiations can range from the despairing (Prime Utilities) to the constructive. It is understood 

that both Chinese contracts were exited for a profit and this was certainly the case when Severn 

Trent concluded fifteen years of involvement with Belgium’s Aquafin. 

Contracts ended at their expiry 


1994 1999 Colombia Ocana Servicios de Ocana 0.079 0.070 

1999 2001 Colombia Ocana Servicios de Ocana 0.079 0.070 

1993 2001 Macao Macao UU 0.000 0.490 

1993 2003 South Africa Sutterheim Suez 0.200 0.000 

2000 2005 Armenia Yerevan ACEA 0.900 0.900 

1999 2005 Kenya Malindi Gauff Ingenieure 0.050 0.010 

2000 2005 Zambia Copper belt Bouygues 0.300 0.300 

19 



2002 2006 Albania Elbasan Berlinwasser 0.100 0.100 

2001 2006 Brazil Mirassol Paz Gestao Ambiental 0.048 0.048 

2000 2006 Jordan Greater Amman Suez 2.500 2.500 

2001 2006 Russia Syzran Syzran Vodokanal 0.186 0.000 

2001 2006 South Africa Johannesburg Suez 0.500 0.000 

2002 2007 Kosovo Gjakova, Gelsenwasser 0.200 0.000 

1993 2007 Mexico Cuernavaca USF / Siemens 0.000 0.173 

Remarkably, given the media coverage, some contracts expire when their allotted time span 

has run its course. The Yerevan and Tirana contracts have been in turn replaced by successor 

contracts. Such events are a healthy reminder that a concession is not forever, it is in effect a 

slice of time and for a further slice to be gained, the contract has to have its evident charms for 

both parties. This will become a more regular feature in future years as the more contracts 

there are, the more contracts will in time end and the longer PSP is in operation, the more 

contracts will reach their expiry date. 

Major PSP contract losses, January 1997 to October 2008 (million people) 

[1] Yearly totals 

Year Water Sewerage Overall 

1997 1.20 0.00 1.20 

1998 0.00 0.00 0.00 

1999 0.48 0.07 0.48 

2000 1.96 6.10 8.06 

2001 0.83 0.07 0.83 

2002 7.15 0.66 7.15 

2003 6.50 0.11 6.61 

2004 3.55 2.18 5.70 

2005 6.96 6.92 11.71 

2006 17.70 5.78 20.85 

2007 1.60 1.00 1.60 

2008 0.00 0.00 0.00 

Total 47.93 22.88 64.19 

[2] Cumulative total 


1997 1.20 0.00 1.20 

1998 1.20 0.00 1.20 

1999 1.68 0.07 1.68 

2000 3.64 6.17 9.74 

2001 4.47 6.24 10.57 

2002 11.62 6.90 17.72 

2003 18.12 7.01 24.33 

2004 21.67 9.19 30.03 

2005 28.63 16.11 41.74 

2006 46.33 21.89 62.59 

2007 47.93 22.89 64.19 

2008 47.93 22.89 64.19 

20 



[3] As a percentage of the population served by contracts identified at the time 


1997 1% 0% 1% 

1998 1% 0% 1% 

1999 1% 0% 1% 

2000 1% 4% 3% 

2001 1% 3% 3% 

2002 4% 3% 5% 

2003 5% 3% 6% 

2004 6% 4% 6% 

2005 7% 6% 8% 

2006 10% 7% 11% 

2007 10% 7% 10% 

2008 10% 7% 10% 

Overall, 10% of contracts have expired in terms of populations served. It is nothing to celebrate, 

but it does serve as a reminder of the nature of this market. Water is an inherently more 

attritional and irrational subject than other utilities and the stabilising contract ending rate since 

2006 offers some encouragement. 

Listed market entries since 1989 

The two tables below outline those companies whose shares have been either listed following 

their sale by municipal (or state) holders or were previously held by private companies. 

Water utility privatisations, by country, 1989–2006 

Company Country IPO date Current status 

Anglian Water UK 1989 Taken private 

Dwr Cymru Welsh Water UK 1989 Not for profit (Glas) 

Northumbrian Water UK 1989 Acquired, re-listed 

North West Water UK 1989 Listed (UU) 

Severn Trent Water UK 1989 Listed 

Southern Water UK 1989 Bought, taken private and again 

South West Water UK 1989 Listed (Pennon) 

Thames Water UK 1989 Bought, taken private 

Wessex Water UK 1989 Bought (twice) 

Yorkshire Water UK 1989 Taken private 

Aquafin Belgium 1991 Bought back 

SmVaK Czech Rep 1993 Taken private, bought 

SABESP Brazil 1994 Listed 

Prime Utilities Malaysia 1994 Re-nationalised 

AMGA Italy 1996 Bought by Iride 

Shanghai Industrial China 1996 Listed 

Suzhou New District China 1996 Listed 

East Water Thailand 1997 Listed 

ACEA Italy 1999 Listed 

ASCM Como Italy 2000 Listed 

EYDAP Greece 2000 Listed (Athens Water) 

Nanhai Development China 2000 Listed 

Beijing Capital China 2000 Listed 

Acegas Italy 2001 Listed 

EYATH Greece 2001 Listed 

21 



Aguas Andinas Chile 2002 Listed 

ASM Brescia Italy 2002 Merged with AEM 

PBA Holdings Malaysia 2002 Listed 

KPS Malaysia 2003 Listed 

Hera Italy 2003 Listed 

Meta Modena Italy 2003 Bought by Hera 

Tallinna Vesi Estonia 2005 Listed 

Manila Water Philippines 2005 Listed 

Jiangxi Hongcheng China 2004 Listed 

COPASA Brazil 2006 Listed 

Market listings of private water utility companies, by country, 1991–2006 

Company Country IPO date Current status 

South Staffordshire UK 1991 Demerged, taken private 

Puncak Niaga Malaysia 1997 Listed 

Intan Utilities Malaysia 1997 Listed 

Darco Water Tech Singapore 2002 Listed 

Goldis Malaysia 2002 Listed 

Eco Water Singapore 2003 Listed 

Salcon Singapore 2003 Listed 

Asia Env Holdings Singapore 2004 Listed 

Bio Treat Technologies Hong Kong 2004 Listed 

Pure Cycle USA 2004 Listed 

Cascal UK 2008 Listed 

The big three (or five) diminish 

In 2002 the author declared that the acquisition of market share by the leading five companies 

was a ‘remorseless’ process. It is evident that when events turn against them, a retreat can be 

equally remorseless. 

People served by company (million) 

1999 2001 2003 2004 2005 2006 2007 2008 

Suez 81.7 94.7 104.2 102.4 104.5 98.2 100.4 88.2 

Veolia 74.8 95.2 104.5 108.2 117.5 115.0 133.9 119.3 

SAUR 27.6 30.4 34.0 33.5 13.7 13.6 13.6 13.0 

Agbar 31.2 35.3 35.2 35.2 34.9 26.0 22.1 29.5 

RWE 23.7 56.5 70.1 69.5 67.2 42.7 35.7 38.2 

Total 239.0 312.1 348.0 348.8 337.8 295.5 305.7 288.2 

Global 350 430 490 545 565 632 681 742 

% by above 68% 73% 71% 64% 60% 47% 45% 39% 

These are net of cross-holdings, so Suez Environnement does not include Agbar 

While a retreat from the peak of 2002 has been an ongoing process, the splitting up of SAUR 

and Bouygues and the divestment of Thames Water and Thames Water International from RWE 

has ramped up these changes, a process that would have gone further if market conditions had 

allowed a more than partial sell-off of American Water in 2008. Presuming AWW will in time be 

deconsolidated; the Big Five’s market share eases further to 37%. 

THREE PERSPECTIVES ON CONTRACT AWARDS 

The Envisager contract award database has been used to provide three perspectives on the 

patterns of contract awards: [1] by competing contract awards to local (one country only), 

regional (contract awards within a single geographical region) and global (contract awards in at 

22 



least two regions); [2] contract awards within the OECD’s 30 member states and outside the 

OECD; and [3] comparing contract awards between those awarded to companies in their home 

country and to those based in other countries. 

People served by contract company award type (million) 

1985-89 1990-94 1995-99 2000-04 2005-08 Total 

Local – Water 39.77 4.40 59.24 50.28 45.03 198.72 

Local – Sewage 52.25 10.73 29.21 54.97 45.11 192.27 

Local – Total 39.77 15.05 60.29 87.06 76.42 278.59 

Regional – Water 2.00 0.75 3.84 12.00 8.48 27.07 

Regional – Sewage 0.00 0.62 4.05 6.70 12.60 23.97 

Regional – Total 2.00 0.81 4.98 17.78 20.38 45.95 

International – Water 6.24 29.80 93.56 79.73 57.37 266.70 

International – Sewage 1.50 6.42 38.23 43.14 28.97 118.26 

International – Total 6.24 30.29 102.73 97.96 74.52 311.74 

Total – Water 48.01 34.95 156.64 142.01 110.88 492.49 

Total – Sewage 53.75 17.77 71.49 104.81 86.68 334.50 

Total – Total 48.01 46.15 168.00 202.80 171.32 636.28 

The 1985-89 figures were inevitably distorted by the England and Wales WaSC privatisation. As 

the English & Welsh WaSCs were all local companies at the time of their classification, they are 

classified as such, irrespective of their subsequent international ambitions. Again, sewerage for 

1990-94 was affected by the ill-fated Malaysian national sewerage PSP. These excepted, there 

appears to be a gradual shift from the international to the local company award. Regional 

players have remained somewhat peripheral, although less so for sewerage than for water. 

Contract awards - % of population served for water 

1985-89 1990-94 1995-99 2000-04 2005-08 Total 

Local – Water 83% 13% 38% 35% 41% 40% 

Regional – Water 4% 2% 2% 8% 8% 5% 

International – Water 13% 85% 60% 56% 52% 54% 

Contract awards - % of population served for sewerage 

1985-89 1990-94 1995-99 2000-04 2005-08 Total 

Local – Sewage 97% 60% 41% 52% 52% 57% 

Regional – Sewage 0% 3% 6% 6% 15% 7% 

International – Sewage 3% 36% 53% 41% 33% 35% 

Contract awards - % of population served for both 

1985-89 1990-94 1995-99 2000-04 2005-08 Total 

Local – Total 83% 33% 36% 43% 45% 44% 

Regional – Total 4% 2% 3% 9% 12% 7% 

International – Total 13% 66% 61% 48% 43% 49% 

The OECD and the rest of the world 

The 30 OECD member countries dominated the global market in the decade from 1985-94. 

Their market share has been almost peripheral in recent years. 

OECD and Rest of the World contract awards 

1985-89 1990-94 1995-99 2000-04 2005-08 Total 

23 



OECD – Water 39.17 16.41 24.20 23.04 5.90 108.72 

OECD – Sewage 52.54 10.96 23.43 28.41 6.57 121.91 

OECD – Total 39.17 21.41 33.31 33.96 9.21 137.06 

ROW – Water 8.84 18.54 132.45 118.97 104.99 383.79 

ROW – Sewage 1.50 6.81 48.06 76.39 80.73 213.49 

ROW – Total 8.84 24.74 134.69 168.85 162.11 499.23 


Total – Sewage 54.04 17.77 71.49 104.80 87.30 335.40 

Total – Total 48.01 46.15 168.00 202.81 171.32 636.29 

Contract awards - % of global contracts awarded to OECD countries 

1985-89 1990-94 1995-99 2000-04 2005-08 Total 

OECD – Water 82% 47% 15% 16% 5% 22% 

OECD – Sewage 97% 62% 33% 27% 8% 36% 

OECD – Total 82% 46% 20% 17% 5% 22% 

Home and abroad – domestic and international contract awards 

This table compares the numbers of people served by new contracts by companies in their 

country of origin (e.g. a WaSC in England & Wales gaining a sewage contract in Scotland, all 

being within the UK) whether local, regional or international companies and those awarded to 

countries operating outside their country of domicile. With the exception of international awards 

for water services during the 1990s (driven by Chile, Argentina, the Philippines and Indonesia) 

the majority of contract awards in population terms have been to home companies. 

Contracts awarded in a company’s home country or internationally 

1985-89 1990-94 1995-99 2000-04 2005-08 Total 

Home – Water 41.77 11.23 72.71 86.75 73.12 285.58 

Home – Sewage 52.25 24.9 42.13 69.85 55.7 244.83 

Home – Total 41.77 21.88 79.16 127.32 110.52 380.65 

International – Water 6.24 23.72 83.94 55.26 37.76 206.92 

International – Sewage 1.5 2.87 29.36 34.95 30.94 99.62 

International – Total 6.24 24.27 88.84 75.49 60.8 255.64 


Total – Sewage 53.75 27.77 71.49 104.80 86.64 344.45 

Total – Total 48.01 46.15 168.00 202.81 171.32 636.29 

Contract awards - % of contracts awarded to companies in their home countries 

1985-89 1990-94 1995-99 2000-04 2005-08 Total 

Home – Water 87% 32% 46% 61% 66% 58% 

Home – Sewage 97% 90% 59% 67% 64% 71% 

Home – Total 87% 47% 47% 63% 65% 60% 

International investment strategies of leading water companies 

The caution of recent years has been maintained, except for a general interest in the Chinese 

market and developed country markets. The latter is of interest given the low proportion of 

contract awards noted in OECD countries in recent years. 

24 



Company 

Suez 

Veolia 

RWE 

SAUR 

Agbar 

FCC 

ACEA 

AWG 

Severn Trent 

UU 

Bouygues 

Cascal 

Strategy 

Withdraw from Latin America and most developing economies save MENA & 

China 

Concentrating on Europe, China and selected markets 

Withdrawing from all markets except Germany and Central Europe 

Concentrate on Europe 

Withdrawal from most of Latin America, investing in Europe and China 

Retain some Latin American activities, invest in Europe and China 

Maintain international activities but no new projects 

All international activities (except Ireland) have been or are being sold 

Maintain asset operation strategy (no capital expenditure) 

Maintain a highly selective policy, emphasising Eastern Europe 

Maintain activities in former French Africa 

Continue to seek suitable contracts globally 

CHINA: AFTER THE OLYMPICS, IT’S BACK TO BUSINESS 

In 2005, contracts covering 105million people were noted. By this edition, contracts covering 

231 million people have been identified, an increase of 126 million people on the 2005 figure, 

via new contract awards and other already awarded contracts which have been subsequently 

identified. In 1989, China accounted for 8% of the people served by the private sector 

worldwide. In 2008, the figure is 38%. The state has declared that USD125billion needs to be 

spent on new projects between 2006 and 2010, with services in 100 cities being opened to 

private investment during this time. It is evident that this remains a work in progress. 

In China, legislation was passed in 2002 outlawing fixed returns on investment for water or 

wastewater projects held and operated by international entities. As a result Berlinwasser and 

RWE Thames sold back their holdings in two projects back to state held entities. This legislation 

does not apply to projects funded and operated by domestic companies and companies such as 

Beijing Capital, Tianjin Capital Environmental Protection and Shanghai Industrial Holdings 

operate contracts on a fixed rate of return basis. 

China, contract awards by year (million of people served) 

Water Sewerage Overall 

1992 1.40 0.00 1.40 

1993 0.00 0.00 0.00 

1994 2.47 0.00 2.47 

1995 1.70 0.00 1.70 

1996 5.54 0.00 5.54 

1997 13.34 0.00 11.25 

1998 3.35 0.00 3.35 

1999 4.55 0.30 4.55 

2000 11.81 5.75 14.56 

2001 4.58 14.33 18.92 

2002 12.11 5.95 18.06 

2003 14.84 11.52 22.36 

2004 16.65 14.96 29.11 

2005 17.47 23.73 39.89 

2006 9.45 10.51 19.96 

2007 15.23 9.09 20.52 

2008 7.95 12.00 17.50 

Total 142.44 108.14 231.14 

25 



As a percentage of the yearly total 


1992 62% 0% 46% 

1993 0% 0% 0% 

1994 16% 0% 16% 

1995 12% 0% 12% 

1996 14% 0% 13% 

1997 34% 0% 27% 

1998 17% 0% 16% 

1999 11% 1% 9% 

2000 33% 27% 34% 

2001 19% 54% 46% 

2002 80% 55% 77% 

2003 45% 51% 51% 

2004 49% 64% 56% 

2005 45% 67% 60% 

2006 29% 51% 45% 

2007 54% 62% 53% 

2008 65% 76% 78% 

During the current decade, China has accounted for at least 50% of contract awards in 

population terms in every year. It has become the powerhouse of the global market and that 

picture does not look like changing in the immediate future. 

Graph – Contract awards in China as a percentage of the global yearly total 

90% 

80% 

70% 

60% 

50% 

40% 


Sewerage 

Overall 

30% 

20% 

10% 

0% 

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

26 



As a percentage of the cumulative total by year 


1992 3% 0% 3% 

1993 2% 0% 2% 

1994 5% 0% 4% 

1995 6% 0% 5% 

1996 8% 0% 7% 

1997 14% 0% 12% 

1998 14% 0% 12% 

1999 14% 0% 12% 

2000 16% 4% 15% 

2001 16% 11% 18% 

2002 19% 13% 22% 

2003 22% 17% 25% 

2004 24% 21% 29% 

2005 26% 27% 33% 

2006 26% 29% 34% 

2007 28% 30% 35% 

2008 29% 32% 36% 

THE ENGLISH & WELSH COMPANIES RETURN TO THEIR ROOTS 

There has been an increasing focus on the regulated activities at the expense of the last 

eighteen years of diversification strategies. This reflects the influence of lower coupon debt and 

refinancing in relation to non core activities. Both AWG and Thames have been spinning off 

their non core activities now that they have been taken private. 

Company 

Non core revenues Current activities 

FY 31/03 2000 Act 2005 Act 2010 

Est. 

AWG 16% 47% 5% Limited infrastructure services 

First Aqua 0% 0% 0% Regulated activities only 

Glas Cymru 63% 0% 0% Regulated activities only 

Kelda 13% 16% 10% Infrastructure services 

Northumbrian [1] 14% 12% 3% Peripheral non regulated 

Pennon 40% 46% 50% Waste management 

Severn Trent 37% 51% 15% Water & laboratory services 

Thames 19% 55% 0% Regulated activities only 

UU 60% 52% 25% Utility services 

Wessex 0% 0% 0% Regulated activities only 

Note: [1] Northumbrian’s 2000 figures are for the year ending 22 December 1988 

Private equity versus listed equity 

The bids for AWG and Thames Water last October and for Southern Water this October 

represent a dramatic continuation of a process that has been building momentum since 2000. In 

2007, one broker had predicted there will be no listed companies by the end of 2008, a 

prediction which was as accurate as some of his colleagues’ pronouncements about their 

understanding of risk management issues in the banking sector. 

27 



Changes in the sector 2000-08 and possible changes to 2010 

Company 2000-07 status 2008-10 changes 

AWG Listed, taken private (Osprey) Private – medium term 

Dwr Cymru Went private (Glas) Private – long term 

Kelda Listed Private – medium term 

Northumbrian Re-listed (ex Suez) Probably remain listed 

Pennon Listed Probably remain listed 

Severn Trent Listed Possibly remain listed 

Southern Private (from RBS to JP Morgan) Private – medium term 

Thames Acquired (RWE then taken private) Private – medium term 

UU Listed Remain listed 

Wessex Re-acquired (Azurix to YTL) Remain with YTL 

Will the allowable cost of capital be at such a generous premium to the cost of funding in the 

2009 Periodic Review? The Regulator remains keen to have as many companies as possible 

retaining a market listing, but this carries little weight when the equity model is materially less 

efficient that the debt one. Has the sector moved on or is this a matter of perception? One of the 

key questions over the next two years will be how to encourage companies to return to the listed 

equity model, perhaps when the Private Equity players are seeking exits in a few years time. 

HOW MANY PEOPLE ARE SERVED BY THE PRIVATE SECTOR? 

To gain a reasonable picture of the status of private sector participation in water and wastewater 

services requires a suitable set of operational assumptions that are robust enough to deal with 

the vagaries of the data that is currently available. 

There are three quantifiable sets of data available: 

[1] Contract information at the time of the award 

[2] Published data on service extension and demand growth 

[3] Data about the current status of markets with a long-established private sector presence 

In addition, populations grow within contract areas as a result of urban migration and indigenous 

population growth. This can be regarded as a contract’s organic growth. These figures are 

extremely difficult to quantify where urbanisation involves people moving into informal 

settlements as the likelihood of any connection to a formal water service (let alone sanitation) is 

minimal unless a specific initiative (such as at La Paz in Bolivia by Suez) has been developed 

by a concession holder. As a result, population growth figures have been kept to a minimum. 

For the sake of simplicity, all contracts that have subsequently been ended whether at the end 

of the contract life or prematurely, as a consequence of various externalities have been 

excluded from the ongoing picture. The major contract exits identified have been included in a 

separate table, as these have become a material factor over the past five years. 

How (and why) numbers served change 

Positive drivers: 

Privatisations and IPOs: Contract awards (Tianjin Capital’s contract gains in China since 

2005), the acquisition of municipal service companies by private companies (ESSAR by Chile’s 

Aguas Neuvas) or stock market flotations (COPASA’s IPO in 2006). In addition, privately held 

companies (Asia Environmental Holdings in Singapore in 2004) can be floated, bringing them to 

the public’s attention. 

Acquisitions: The acquisition of small privately held companies by larger entities. This is 

particularly notable in the USA, where there are many privately held companies serving 150 - 

5,000 people and having a very low profile. Aqua America and AWW both pursue an aggressive 

tuck-in acquisition strategy, taking up 5,000-15,000 new customers each year this way. It is also 

28 



seen in Italy and Greece, with ACEA actively seeking to take in the small municipalities in the 

Rome region. 

Service extension and population growth: Water and sewerage services are extended to 

people who have previously relied on water vending or informal water supplies. New 

developments within a concession area are connected to the networks. Manila Water is an 

example of both. 

Negative drivers: 

Condemnations and re-nationalisations: The USA can be a surprisingly hostile place for the 

private sector. Municipalities can ‘condemn’ a regulated operator under ‘Eminent Domain’ law 

and seek to buy its assets from the owner as recently seen at Pennichuck, a case that is 

already generating useful attorney fees. In France concessions were nationalised as the political 

climate changed between 1918 and 1939 and Suez has lost two significant contracts since 

2001. Paris is also in some form of public control but the status of this change is unclear as 

Veolia and Suez continue to manage many aspects of these services. 

Time: Contracts do not last forever and there is no obligation to renew them at their expiry. 

Indeed, that can be the essence of a BOT contract. However, assets do not last forever and the 

need to upgrade, rehabilitate and extend assets points towards new contracts being awarded. 

Divestment: Concessions being handed back as a company changes strategy (Suez in Puerto 

Rico), or judges that a contract has become inoperable (International Water in Bolivia). 

Companies can also be sold to municipalities when a parent company changes direction as 

seen with Allete’s Florida water activities. 

Population decrease: This will affect a number of concessions and companies in Europe in the 

longer term. 

People served by contract awards, 1987-2008 

These databases exclude France, Spain (with two exceptions) and the USA due to the contract 

award details in these countries not being typically available and individually of a small and nonspecific 

nature. The average contract award in France for example covers 2,000 people. 

Not all water privatisations are fated to be subsumed within other companies, even though this 

sometimes appears to be the fate of the British water sector. In general, market listings to date 

have come about through government or municipal privatisations. 

Published data on service extension subsequent to the contract award 

Examples of service extension identified include Metro Manila (water service extension by both 

concessions), and various contracts in Brazil, Malaysia and in Shanghai. In many cases the 

service extension seen to date is a partial picture. 

The long established markets 

There were six markets with an extensive private sector presence at the start of 1987: the USA 

(mainly regulated activities, rather than the non-regulated O&M outsourcing contracts that have 

become a feature of the past decade); France (the private sector share has advanced from 72% 

in 1987 to 79% by 2005); Italy (11% of the market served by the private sector and semi-private 

companies in 1987); Spain (the private sector share has advanced from 35% in 1987 to 46% by 

2005); Germany (Gelsenwasser and some local companies holding approximately 8% of the 

market through long term contracts) and; England & Wales (there were 29 Statutory Water 

Companies serving 13.8million people in 1989). 

29 



Country Comments Million people 

England & Wales SWCs in operation in 1987 13.8 

USA Non-regulated activities 40.0 

USA Regulated activities 25.1 

Germany PSP since 1887 6.4 

Italy Mainly pre ATO contracts 6.5 

Spain PSP since 1867 22.0 

France PSP since 1853 45.5 

Total 159.3 

To count as private sector participation, contracts have to be of at least five years in duration 

and either a formally established O&M contract, a concessional contract or an outright asset 

privatisation. In this context, national private water service companies are defined as legal 

entities that have signed a formal contract with the relevant municipal or state authorities for the 

provision of water or wastewater services. In order to distinguish between such contracts and 

formal or quasi legal contracts drawn up with small local entities, these contracts also cover at 

least 10,000 people. Contracts for industrial water services or for developing industrial zones 

are excluded. 

A global figure 

The uncorrected total feeds directly from the Envisager databases. It does not take into account 

all population growth within contract areas since the contract award date, nor all service 

extension work. Neither does it include small formal PSP projects such as those highlighted by 

the 2006 World Bank study (Triche et al, 2006). 

[1] Contract data driven estimate 

Contract type 

Million people 

Contract awards 636.3 

Contract endings -65.0 

Incumbent markets 159.3 

Global total 730.6 

[2] A corrected estimate 

Contract type 


Global total – uncorrected 730.6 

Small formal PSP 10.0 

Contract service extension 5.0 

Population growth & urbanisation 7.0 

Global total – corrected 752.6 

The final figure compares with, for example 485 million people as being identified as served by 

the private sector in the 2003 edition and 563 million in 2005. The rise both reflects improved 

data as well as contract awards in recent years. 

COMPANIES AND THEIR COVERAGE 

This table outlines the number of people served by each country in their home and international 

markets. Wherever possible, it refers to actual companies rather than private equity holders. 

When looking at the company entries and contract awards to date, the shift away from the 

global market leaders to more diverse and local management and financing solutions continues. 

These entries highlight the notable development of activities in the sector by companies based 

in China, Malaysia and Singapore. Other players are emerging across Latin America and in the 

Philippines and more recently India, thus compounding a trend away from European and 

Western company experience and finance operating globally towards more local applications. 

30 



Size, home and abroad 

The table below needs to be approached with some circumspection. While numbers served in 

‘home’ contracts typically refer to contracts where the company has a majority holding of a 

concession, ‘international’ contracts (here defined as being outside the country of the 

company’s registration) may well involve relatively small stakes. Where companies have 

minority shareholdings in contracts managed by other water companies, these have been 

ignored. These also exclude companies which only serve industrial water customers or where 

no reliable customer data is available. 

Company Home Intl Total % Home 

Argentina 

Latin Aguas 1,152,000 0 2,173,000 100% 

Australia 

Macquarie 0 17,700,000 17,700,000 0% 

United Group 0 0 0 N/A 

Westpac 0 1,720,000 1,720,000 0% 

Austria 

Aquaplus 10,000 70,000 80,000 13% 

Energie 130,000 517,000 647,000 20% 

EVN 488,000 2,795,000 3,283,000 15% 

Brazil 

Andrade Gutierrez 8,136,000 0 8,136,000 100% 

COPASA 12,200,000 0 12,200,000 100% 

Gruppo Equipav 1,490,000 0 1,490,000 100% 

SABESP 26,200,000 0 26,200,000 100% 

Canada 

Aquatech 856,000 0 856,000 100% 

Chile 

Aguas Andinas [1] 6,591,000 0 6,591,000 100% 

Aguas Nuevas 1,503,000 0 1,503,000 100% 

Antofagasta 485,000 0 485,000 100% 

ESVAL 1,902,000 0 1,902,000 100% 

Nuevosur 600,000 0 600,000 100% 

Southern Cross 2,100,000 0 2,100,000 100% 

China 

Anhui Water Resources N/A N/A N/A N/A 

Beijing Capital 10,750,000 0 10,750,000 100% 

Bio-Treat Technology 6,250,000 0 6,250,000 100% 

Cathay International Water 3,500,000 0 3,500,000 100% 

Cheung Kong Infrastructure 0 348,000 348,000 0% 

China Everbright 3,750,000 0 3,750,000 100% 

China Water Group 127,000 0 127,000 100% 

China Water Affairs Group 6,850,000 0 6,850,000 100% 

China Water Industry Group 15,280,000 0 15,280,000 100% 

China Water Industry Investment 

Citic Pacific 600,000 0 600,000 100% 

Eguard Resources Development 2,050,000 0 2,050,000 100% 

Global Green Tech Group 800,000 0 800,000 100% 

Guangdong Investment 6,800,000 0 6,800,000 100% 

Guozhen 2,055,000 0 2,055,000 100% 

Interchina Holdings 8,170,000 0 8,170,000 100% 

Jiangxi Hongcheng Waterworks 1,550,000 0 1,550,000 100% 

Nanhai Development Ltd 1,100,000 0 1,100,000 100% 

31 



NWS Holdings 16,120,000 0 16,120,000 100% 

Ningbo Fuda Company 400,000 0 400,000 100% 

Qianjiang Water Resources 1,315,000 0 1,315,000 100% 

Shanghai Industrial Holdings 13,900,000 0 13,900,000 100% 

Shanghai Chengtou 3,000,000 0 3,000,000 100% 

Shanghai Urban Construction Group 2,000,000 0 2,000,000 100% 

Shanghai Young Sun 500,000 0 500,000 100% 

Shenzhen Kondarl N/A N/A N/A N/A 

Sichuan Guangan AAA Public 100,000 0 100,000 100% 

Suzhou New District 100,000 0 100,000 100% 

Tianjin Capital Env Protection 12,350,000 0 12,350,000 100% 

Towngas 3,030,000 0 3,030,000 100% 

Wuhan Sanzheng Industry Holdings 3,500,000 0 3,500,000 N/A 

Xinjiang Hui Tong 380,000 0 380,000 100% 

Estonia 

Tallinna Vesi 405,000 0 405,000 100% 

France 

Alteau 250,000 0 250,000 100% 

Bouygues 0 9,160,000 9,160,000 0% 

SAUR 5,500,000 7,454,000 12,954,000 42% 

Sogedo 50,000 0 50,000 100% 

STGS 166,000 0 166,000 100% 

Suez 12,300,000 98,479,116 110,479,116 11% 

Ternois Epuration 80,000 0 80,000 100% 

VE 24,100,000 95,171,000 119,271,000 20% 

Germany 

E.ON N/A 0 N/A N/A 

Gelsenwasser 5,800,000 351,000 6,151,000 94% 

Linde 0 500,000 500,000 0% 

MVV 990,000 0 990,000 100% 

Remondis 200,000 4,101,000 4,210,000 5% 

RWE 13,200,000 25,035,000 38,235,000 35% 

Greece 

Athens Water 4,000,000 0 4,000,000 100% 

Thessaloniki Water 850,000 0 850,000 100% 

India 

BHEL 100,000 0 100,000 100% 

IVRCL 1,100,000 0 1,100,000 100% 

JUSCO 1,030,000 0 1,030,000 100% 

Larssen & Toubro 500,000 0 500,000 100% 

Italy 

ACEA 9,605,000 5,195,000 14,305,000 61% 

Acegas-APS 669,000 0 669,000 100% 

ASCM Como 250,000 0 250,000 100% 

ASM Brescia 563,000 0 563,000 100% 

Edison 0 2,500,000 2,500,000 0% 

Iride 2,925,000 667,000 3,592,000 74% 

Hera 3,032,000 0 3,042,000 100% 

Kuwait 

Utilities Development Company 1,900,000 0 1,900,000 100% 

Japan 

Mitsui 0 1,267,000 1,267,00 0% 

Malaysia 

32 



EMS Energy N/A 0 N/A N/A 

Goldis 0 500,000 500,000 0% 

Intan Utilities 600,000 0 600,000 100% 

K P Selangor 500,000 0 500,000 100% 

PBA Holdings 1,450,000 250,000 1,700,000 85% 

PPB 0 250,000 250,000 0% 

Puncak Niaga 7,100,000 0 7,100,000 100% 

Ranhill Utilities 2,950,000 458,000 4,408,000 90% 

Salcon 0 3,400,000 3,400,000 0% 

Taliworks 2,045,000 200,000 2,245,000 91% 

YTL Holdings 0 2,397,000 2,397,000 0% 

Mexico 

Aquasol 500,000 0 500,000 100% 

Morocco 

LYDEC 2,800,000 0 2,800,000 100% 

Philippines 

Benguet 250,000 0 250,000 100% 

Manila Water 5,600,000 0 5,600,000 100% 

Metro Pacific 5,900,000 0 5,900,000 100% 

Poland 

Aquarius 52,000 0 52,000 100% 

Portugal 

Mota-Engil 529,000 0 529,000 100% 

Russian Federation 

Rosvodokanal 2,010,000 0 2,101,000 100% 

RKS 3,745,000 0 3,745,000 100% 

Syzran Vodokanal 186,000 0 186,000 100% 

Qatar 

QEWC 500,000 0 500,000 100% 

Saudi Arabia 

Amiantit 0 1,727,000 1,727,000 0% 

Singapore 

Asia Environment 0 2,975,000 2,975,000 0% 

Asia Water Technology 0 3,563,000 3,563,000 0% 

Boustead 0 550,000 550,000 0% 

Darco 0 850,000 850,000 0% 

Dayen 125,000 0 125,000 100% 

Epure International 0 6,030,000 6,030,000 0% 

Hyflux 350,000 1,845,000 2,195,000 16% 

Keppel 700,000 0 700,000 100% 

Sembcorp 400,000 0 400,000 100% 

Spain 

Acciona 3,500,000 3,300,000 6,800,000 52% 

Agbar [2] 15,000,000 14,511,718 29,511,718 51% 

Agval [3] 2,040,000 150,000 2,190,000 93% 

FCC [4] 13,000,000 9,900,000 22,900,000 57% 

Gruppo ACS 2,200,000 2,100,000 4,300,000 51% 

Iberdrola 0 760,000 760,000 0% 

OHL 750,000 210000 960,000 78% 

Sacyr Vallehermoso 822,000 1,754,000 2,576,000 30% 

Tecasva 0 7,204,000 7,204,000 0% 

Sweden 

Lackeby Water Group 0 250,000 250,000 0% 

33 



Thailand 

East Water 525,000 0 525,000 100% 

Thai Tap 1,200,000 0 1,200,000 100% 

UK 

AWG 5,792,000 2,500,000 8,292,000 70% 

Cascal 430,000 3,612,000 4,032,000 11% 

Costain N/A 0 N/A N/A 

South Downs 665,000 0 665,000 100% 

Dee Valley 258,000 0 258,000 100% 

Glas Cymru 3,043,000 0 3,043,000 100% 

Sutton & East Surrey 560,000 0 560,000 100% 

Kelda Group 5,993,000 5,993,000 100% 

Nature Technology Solutions N/A 0 N/A N/A 

Northumbrian Water 6,296,000 246,000 6,542,000 96% 

Pennon Group 1,516,000 0 1,516,000 100% 

First Aqua 4,400,000 0 4,400,000 100% 

Severn Trent 8,280,000 6,195,000 14,475,000 57% 

South East Water 1,500,000 0 1,500,000 100% 

South Staffordshire 1,233,000 0 1,233,000 100% 

Swan Group 563,000 0 563,000 100% 

United Utilities 7,285,000 13,455,000 20,790,000 34% 

USA 

AECOM 0 5,163,000 5,163,000 0% 

Alliance Water Resources 230,000 0 230,000 100% 

American States 1,225,000 0 1,225,000 100% 

Aqua America 3,120,000 0 3,120,000 100% 

American Water Works 16,600,000 400,000 17,000,000 98% 

Artesian 250,000 0 250,000 100% 

Cadiz N/A 0 N/A N/A 

California WS 2,250,000 0 2,250,000 100% 

CH2M Hill 5,000,000 0 5,000,000 10% 

Connecticut 278,000 0 278,000 100% 

Consolidated Water 0 46,000 46,000 0% 

Covanta Holdings 400,000 0 400,000 100% 

Global Water Resources 110,000 0 110,000 100% 

Han’s Technologies 0 680,000 680,000 0% 

Middlesex 385,000 0 385,000 100% 

Pennichuck 138,000 0 138,000 100% 

Pico Holdings N/A 0 N/A N/A 

Pure Cycle N/A 0 N/A N/A 

SJW 1,100,000 0 1,100,000 100% 

Southwest 1,110,000 0 1,110,000 100% 

Tyco 0 350,000 350,000 0% 

Utilities Inc 1,000,000 0 1,000,000 100% 

Western Water N/A N/A N/A N/A 

York 171,000 0 171,000 100% 

[1] Also included in Aguas de Barcelona 

[2] Also in Suez 

[3] Now separate from SAUR 

[4] VE and FCC share the Pro-Activa activities 

34 



Companies covered by country 

This excludes entries for companies only included in the country entries. 

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

Argentina 0 0 0 0 0 1 1 1 1 1 

Austria 0 0 1 1 1 2 3 3 3 3 

Australia 0 0 0 0 0 0 1 1 3 3 

Belgium 1 1 1 1 1 1 1 0 0 0 

Brazil 1 1 1 1 1 1 1 4 4 4 

Canada 0 0 0 0 0 1 1 1 1 1 

Chile 1 1 1 1 1 4 4 5 5 6 

China 4 6 7 7 9 16 19 30 31 31 

Czech Republic 1 1 1 0 0 1 1 0 0 0 

Estonia 0 0 0 0 0 0 1 1 1 1 

France 3 3 3 3 3 3 4 4 4 4 

Germany 5 5 5 4 4 4 4 4 5 5 

Greece 0 1 2 2 2 2 2 2 2 2 

India 0 0 0 0 1 2 3 3 3 4 

Italy 5 9 8 8 12 12 7 7 9 9 

Japan 0 0 0 0 0 0 0 1 0 1 

Kuwait 0 0 0 0 0 0 0 0 1 1 

Malaysia 3 3 2 6 10 10 11 11 11 11 

Mexico 0 0 0 0 0 1 1 1 1 1 

Morocco 0 0 0 0 0 0 1 1 1 1 

Netherlands 0 1 1 1 1 1 1 0 0 0 

Philippines 0 0 0 0 2 3 3 3 3 3 

Portugal 0 0 0 0 0 0 1 1 1 1 

Qatar 0 0 0 0 0 0 0 1 1 1 

Saudi Arabia 0 0 0 0 0 1 1 1 1 1 

Singapore 0 0 0 0 4 6 6 6 6 6 

Spain 6 8 8 8 8 7 8 8 8 7 

Sweden 0 0 0 0 0 0 1 1 1 1 

Thailand 2 1 1 1 1 1 1 2 2 2 

United Kingdom 18 16 15 17 18 17 19 18 15 15 

USA 20 24 25 23 23 20 21 21 21 24 

The table below summarises these results in terms of the number of companies identified, along 

with which countries they are based in. 

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 

Number of countries 13 15 16 15 18 22 28 27 27 28 

Number of companies 70 81 82 84 102 117 128 142 145 150 

- OECD countries 59 69 70 68 73 72 77 74 75 78 

- Advanced developing 2 2 2 2 6 13 13 18 19 20 

- Developing 9 10 10 14 23 32 38 50 51 52 

COUNTRY MARKET DEVELOPMENT, PROSPECTS AND PROGNOSIS 

A new set of forecasts 

After ten sets of annual forecasts, 2015 is not as far distant as it appeared to be in 1999. It is 

therefore timely to introduce a longer term forecast. 

35 



The addressable population is the percentage of the population (2007 figures) that the author 

believes have a better than even chance of being served with privatised water and/or sewerage 

provision by 2015. That may once have appeared a long way off, but it is not as distant as it 

may have seemed to have been in 1999 and it does allow for current political, regulatory and 

market trends to be translated into realistic market developments, while allowing for years of 

contract award and implementation slippage for political and economic changes. 

The table below consists of a set of estimates for the current extent of private sector 

participation in water and sewerage services for the main markets, along with forecasts for the 

potential extent of private sector penetration by 2015 and 2025. Perhaps 25-30% of the market 

is ‘suitable’ for PSP in that PSP can offer genuine benefits to people under current conditions 

and those foreseeable in 2025. Almost all of this market is the urban market, meaning that by 

2025, 45-55% of the urban market is potentially suitably placed for PSP. 

The potential for private sector participation 

Not all markets are suitable for privatisation, even on a 25 or a 50 year view. Yet the only 

predictable element in the above statement is its inherent unpredictability. In 1999, 5% of the 

world’s population was served to some extent by the private sector. Since 2006, this had 

increased to 10% of the world’s population and to 11% since 2007. 

Current and forecast extent of private sector participation 

What has been fascinating to observe is the steady development of numbers served and a 

series of forecasts for PSP coverage between 1999 and 2008 that have remained in a 15-17% 

range. Our revised forecast for the extent of PSP in 2015 is 1,161million, an upwards 

adjustment of 13million on the forecast made in 2007. 

2015 forecasts (million people) 

Year Number % of global 

population 

2003 

2004 

2005 

2006 

2007 


1,160 

1,125 

1,085 

1,145 

1,148 

1,161 

16% 

15% 

15% 

16% 

16% 

16% 

The figures for privatisation to date demonstrate the variable progress that the private sector 

has made. In Western Europe, private sector service provision is already becoming 

commonplace, which can be related to the global domination of international markets by a 

number of companies from this region. The forecasts for most other regions with the exception 

of the Americas are on the cautious side for the time being. What is notable is the gap between 

the estimation of the addressable populations in the Americas and the extent of privatisation to 

date. 

What has been consistently evident over the past years is that nothing can be taken for granted 

when it comes to assessing market developments and prospects. China was seen as something 

of interest in 1999, now it is the single most important global driver. The Russian Federation 

was seen as ‘unsuitable before perhaps 2050’ as recently as five years ago. Now a market is 

emerging, especially in Moscow and St. Petersburg. India was beyond most boundaries, 

characterised by blocked initiatives and mothballed plans. Now not only have a number of 

contracts been awarded since 2002, but also the new Congress Government has made it clear 

that PSP is to be highlighted as a method for mobilising new resources. 

36 



Western Europe 

PSP in 2008 PSP by 2015 PSP by 2025 

Water Sewerage Water Sewerage Water Sewerage 

Austria 7% 0% 9% 14% 12% 17% 

Belgium 3% 10% 3% 11% 3% 12% 

Denmark 1% 0% 2% 2% 2% 2% 

Finland 0% 1% 0% 2% 2% 2% 

France 74% 55% 80% 71% 84% 76% 

Germany 21% 18% 26% 29% 27% 31% 

Greece 44% 37% 46% 45% 48% 48% 

Ireland 1% 42% 21% 46% 19% 47% 

Italy 40% 29% 51% 46% 53% 50% 

Netherlands 0% 10% 0% 11% 0% 11% 

Norway 6% 0% 5% 10% 8% 12% 

Portugal 25% 23% 56% 51% 61% 56% 

Spain 43% 50% 63% 57% 64% 62% 

Sweden 1% 1% 5% 5% 5% 5% 

Switzerland 0% 0% 0% 0% 0% 0% 

United Kingdom 88% 90% 94% 96% 94% 97% 

Central & Eastern Europe 



Albania 16% 15% 24% 30% 29% 31% 

Armenia 65% 65% 73% 67% 76% 69% 

Azerbaijan 1% 0% 6% 11% 11% 16% 

Bulgaria 20% 16% 42% 49% 53% 53% 

Croatia 0% 17% 22% 27% 27% 34% 

Czech Republic 82% 76% 84% 79% 89% 87% 

Estonia 31% 31% 38% 38% 42% 42% 

Georgia 24% 0% 29% 12% 46% 38% 

Hungary 29% 27% 36% 36% 37% 37% 

Kosovo 11% 0% 13% 0% 16% 11% 

Latvia 0% 0% 23% 23% 24% 24% 

Lithuania 0% 0% 15% 0% 19% 19% 

Moldova 18% 0% 19% 7% 29% 14% 

Montenegro 25% 25% 25% 25% 33% 33% 

Poland 3% 3% 11% 13% 16% 22% 

Romania 11% 0% 19% 17% 26% 21% 

Russian Federation 7% 1% 18% 12% 23% 20% 

Slovakia 20% 20% 37% 37% 38% 38% 

Slovenia 0% 11% 25% 25% 26% 26% 

Ukraine 0% 0% 5% 5% 13% 10% 

Middle East and North Africa 



Algeria 31% 10% 35% 16% 42% 23% 

Bahrain 0% 0% 100% 100% 100% 100% 

Egypt 0% 7% 6% 17% 10% 25% 

37 



Iraq 0% 0% 0% 0% 0% 0% 

Israel & Palestine 13% 0% 21% 8% 21% 28% 

Jordan 0% 37% 43% 36% 50% 63% 

Kuwait 0% 66% 100% 100% 100% 100% 

Lebanon 0% 0% 11% 11% 0% 0% 

Morocco 21% 15% 29% 23% 37% 32% 

Oman 33% 27% 39% 48% 42% 56% 

Qatar 0% 88% 40% 100% 91% 91% 

Saudi Arabia 26% 12% 43% 34% 50% 43% 

Tunisia 0% 0% 18% 0% 33% 16% 

Turkey 2% 3% 10% 7% 3% 11% 

UAE 3% 33% 38% 47% 63% 79% 

Yemen AR 0% 0% 0% 0% 0% 0% 

Sub-Saharan Africa 



Burkina Faso 0% 0% 11% 0% 13% 0% 

Cameroon 29% 0% 28% 9% 30% 8% 

Central African Rep 2% 0% 5% 0% 17% 0% 

Chad 7% 0% 22% 0% 9% 0% 

DR Congo 0% 0% 0% 0% 0% 0% 

Côte d’Ivoire 26% 8% 36% 13% 38% 15% 

Ethiopia 0% 0% 0% 0% 0% 0% 

Gabon 47% 0% 47% 0% 53% 0% 

Ghana 26% 0% 26% 0% 28% 6% 

Guinea 4% 0% 18% 0% 21% 0% 

Guinea-Bissau 0% 0% 14% 0% 17% 0% 

Kenya 0% 0% 6% 0% 14% 2% 

Lesotho 0% 0% 0% 0% 0% 0% 

Mali 1% 0% 1% 0% 2% 0% 

Mauritius 0% 15% 0% 15% 16% 16% 

Mozambique 4% 0% 12% 0% 21% 0% 

Namibia 0% 4% 0% 7% 0% 10% 

Niger 4% 0% 8% 0% 8% 0% 

Nigeria 0% 0% 0% 0% 5% 1% 

Senegal 31% 0% 34% 0% 39% 6% 

South Africa 3% 1% 4% 2% 10% 4% 

Sudan 6% 0% 8% 0% 8% 0% 

Tanzania 0% 0% 0% 0% 0% 0% 

Uganda 0% 0% 5% 3% 9% 0% 

Zambia 0% 0% 4% 0% 5% 0% 

South East and East Asia and Oceania 



Australia 27% 7% 37% 13% 43% 18% 

China 10% 8% 14% 12% 18% 16% 

Hong Kong 67% 0% 91% 26% 90% 30% 

Indonesia 5% 0% 8% 1% 13% 1% 

Japan 0% 0% 5% 13% 8% 16% 

38 



Macao 100% 0% 100% 0% 100% 100% 

Malaysia 61% 0% 80% 33% 80% 36% 

New Zealand 1% 10% 3% 11% 3% 10% 

Philippines 14% 2% 22% 8% 26% 13% 

Singapore 33% 0% 33% 8% 33% 10% 

South Korea 0% 5% 0% 16% 10% 24% 

Taiwan 13% 1% 30% 2% 35% 6% 

Thailand 3% 0% 64% 22% 65% 36% 

Vanuatu 15% 0% 20% 0% 33% 0% 

Vietnam 0% 0% 8% 0% 12% 5% 

South and Central Asia 



Bangladesh 0% 0% 0% 0% 0% 0% 

India 1% 0% 3% 0% 5% 1% 

Iran 0% 0% 0% 0% 0% 0% 

Kazakhstan 2% 0% 3% 0% 6% 3% 

Maldives 32% 0% 50% 0% 50% 0% 

Mongolia 0% 0% 0% 0% 0% 0% 

Nepal 0% 0% 3% 0% 8% 0% 

Pakistan 0% 0% 0% 0% 0% 2% 

Sri Lanka 0% 0% 1% 0% 5% 0% 

Uzbekistan 2% 0% 3% 0% 6% 3% 

The Americas 



Argentina 14% 8% 23% 18% 26% 22% 

Belize 0% 0% 53% 33% 50% 50% 

Bolivia 0% 0% 0% 0% 0% 0% 

Brazil 28% 18% 36% 24% 52% 46% 

Canada 2% 0% 7% 9% 8% 11% 

Chile 81% 77% 95% 94% 96% 93% 

Colombia 26% 10% 31% 16% 34% 20% 

Cuba 12% 0% 13% 0% 15% 4% 

Dominican Republic 13% 0% 13% 0% 13% 8% 

Ecuador 19% 13% 38% 38% 43% 40% 

Honduras 7% 7% 8% 8% 10% 10% 

Mexico 12% 9% 22% 17% 24% 20% 

Panama 9% 0% 53% 53% 56% 56% 

Paraguay 0% 0% 4% 0% 6% 3% 

Peru 3% 0% 16% 13% 29% 35% 

Trinidad & Tobago 0% 0% 71% 71% 79% 79% 

Uruguay 3% 3% 9% 6% 14% 14% 

USA 16% 5% 20% 8% 23% 11% 

Venezuela 0% 0% 8% 6% 14% 11% 

39 



People served by private water or sewerage services in 2007 and forecast for service in 

2015 

Million people 2008 2015 2025 

Western Europe 177.1 44% 217.5 53% 229.6 55% 

C&E Europe 33.8 10% 64.4 20% 81.1 27% 

ME & Africa 67.3 6% 119.1 8% 202.6 12% 

South & Central Asia 10.1 1% 53.1 3% 97.4 5% 

South East Asia 250.7 12% 436.1 20% 555.2 24% 

Oceania 8.4 25% 12.1 32% 14.7 36% 

North America 93.9 21% 137.9 29% 209.0 40% 

Latin America 79.9 17% 120.5 24% 148.0 27% 

World total 721.2 11% 1160.6 16% 1537.6 19% 

MERGERS AND ACQUISITIONS 

Mergers and acquisition activity in the sector has been remarkably intense over the past 

decade, reflecting how ownership changes as strategies and perspectives change. Over 80 

corporate transactions have been listed here, which have taken place since 1997. These 

transactions are primarily in the water sector and involved at least USD10million being paid for 

their stakes. In addition, more bids are in the offing, especially in Chile, the Philippines and 

perhaps in the UK. A considerable number of smaller transactions (typically 20-40 per annum) 

have also been recorded, especially in the US, where regulated utilities ‘tuck in’ privately-owned 

small water systems near to their own systems, in order to expand their customer base and 

benefit from economies of scale. These major transactions can be divided into four areas: 

1. Acquisitions of listed companies 

2. Acquisitions of municipal stakes 

3. Acquisitions of private companies and divisions 

4. Acquisitions of strategic stakes 

Where appropriate, an implied value has been derived for the company by dividing the actual 

price paid by the size of the share stake acquired. Disclosure of earnings and asset earnings is 

somewhat inconsistent and incomplete, so two measures have been used here: the price paid 

per person (implied value divided by the number of people served either by water or sewerage 

services), and price/turnover (implied value divided by revenues) to outline the varying 

valuations for these assets and activities. 

Private equity deals, 2001–08 

This list covers all 21 major deals where a company has either been acquired by a private 

equity house or sold from one such institution to another. 

Company Holding Date Stake Price 

WestLB Mid Kent 03/2001 100.0% GBP106.0m 

Glas Cymru Dwr Cymru 05/2001 100.0% GBP1,850.0m [3] 

South Downs Portsmouth 10/2001 100.0% GBP71.0m 

RBS Southern Water 04/2002 100.0% GBP1,050.0m 

Macquarie South East 09/2003 100.0% GBP426.0m [3] 

Consorcio Financiero ESVAL [1] 10/2003 49.8% USD92.3m 

Penta Finance SmVaK (AWG) 11/2003 54.3% EUR54.5m 

Penta Finance SmVaK (Ondeo) 04/2004 44.1% EUR46.5m 

Arcapita Bank South Staffs 11/2004 100.0% GBP143.0m 

PAI SAUR 02/2005 85.0% EUR1,037.0m 

Hastings Swan Group 02/2005 100.0% AUD210.0m 

AIG Utilities Inc 05/2005 100.0% N/A 

Terra Firma (UK) East Surrey 10/2005 100.0% GBP435.0m 

Deutsche Bank East Surrey [2] 12/2005 100.0% GBP189.0m 

40 



Macquarie Aquarion 02/2006 100.0% USD860.0m [3] 

Aqualia SmVak 04/2006 98.4% EUR167.0m 

Westpac South East 01/2006 100.0% GBP665.0m [3] 

Osprey AWG 10/2006 100.0% GBP2,200m 

Macquarie Thames Water 10/2006 100.0% GBP8,000.0m [3] 

CIF / JP Morgan [4] Southern Water 10/2007 100.0% GBP4,195.0m 

Alinda IF South Staffs 10/2007 100.0% N/A 

Saltaire Water [5] Kelda 02/2008 100.0% GBP3,036.0m 

Notes: 

[1] 44.8% acquired by Consorcio Financiero and 5.0% by the Moneda Chile Fund. 

[2] The original acquisition of East Surrey Holdings plc included the assets of Phoenix Gas, 

which have been retained by Terra Firma. 

[3] Cash and assumed debt 

[4] JP Morgan Asset Management Infrastructure 32%, CIF 27%, UBS 18% 

[5] CII 47%, GIC Infra Holdings 33% & Infracapital 20% 

Bids for listed companies 

The highest prices paid are for asset-owning companies in the US and the UK. In the former, 

the level of activity has been intense, with a significant proportion of the regulated customer 

base having seen its owners change hands twice during this period. The lower prices for 

SmVaK and ScVK reflect their being non-asset owning companies in the Czech Republic. 

Acquisitions, by bidding and target company, 1998–2007, (USDmillion) 

Year Bidder Target Bid price 

(USDm) 

Stake bought USD per 

person 

Price / 

turnover 

1998 Azurix Wessex Water 2,500 100% 702 5.9 

1998 Aqua America Consumers 463 100% 691 4.7 

1998 California WS Dominguez 64 100% 427 2.6 

1999 AWG SmVaK 48 53% 60 2.8 

1999 Union Fenosa Cambridge 87 100% 300 2.9 

1999 Anglian Hartlepool 30 100% 333 3.0 

1999 Kelda York Waterworks 45 100% 265 3.2 

1999 Thames E'Town 923 100% 1,420 6.3 

1999 Kelda Aquarion 444 100% 888 3.8 

1999 American WW SJW Corp 390 100% 398 3.7 

1999 American WW NEI 700 100% 412 3.9 

1999 Veolia ScVK 27 38% 37 1.9 

1999 Suez United Water 927 67% 553 3.9 

2000 RWE Thames 6,750 100% 356 4.1 

2000 American States CCWC 31 100% 775 N/A 

2000 American WW Citizens Utilities 49 100% 445 0.5 

2000 American WW UWR 835 100% 835 N/A 

2001 TMWA Sierra Pacific 350 100% 1,400 N/A 

2001 RWE American WW 4,600 100% 341 3.2 

2004 Arcapita South Staffs 245 100% 199 2.4 

2006 Agbar Bristol Water 281 100% 264 2.2 

2007 ESVAL OTPP 365 49% 746 4.3 

2007 ESSBIO OTPP 340 51% 669 4.6 

2007 RUAS Veolia 42 100% 323 1.1 

The two bids for Thames are for somewhat different entities. The EUR11.3billion bid in 2000 

included a GBP4.3billion bid for the company’s listed shares, while the GBP8.0billion bid in 

2006 includes Macquarie paying GBP250million for 11% of Thames’ equity, valuing Thames’ 

equity at GBP2,275million, with the rest being accounted for by debt. RWE believes that it has 

made a EUR500million profit in this sale. 

41 



Equity stakes in municipal/state entities acquired by listed companies 

This list is by no means comprehensive, but it highlights that USD7.4billion has been spent by 

the private sector in acquiring equity stakes from governments and municipalities in the past 

nine years. Including other transactions where data was inadequate for inclusion, the real figure 

is likely to be in the range of USD9.0–10.5billion. Assets are not actually being bought in these 

cases, but instead either the equity of an operating company to manage the underlying assets 

or a minority stake in the asset owning company is being bought. The high price/turnover ratios 

seen, especially in Chile, reflect the potential for revenue growth through extending water and 

sewerage services and, even more dramatically, sewage treatment. 

Completed acquisitions of stakes in municipal/state entities, by bidding company and 

target, 1997–2006 (USDmillion) 

Year Bidder Target Bid 

price 

(USDm) 

1997 Veolia Budapest 

Stake bought 

USD per 

person 

Price / 

turnover 

79 25% 158 5.4 

Sewerage 

1997 Suez Budapest Water 82 25% 164 5.5 

1998 Veolia Sanepar 217 30% 100 2.6 

1999 Bouygues/Azurix OSM 133 80% 88 3.0 

1999 Azurix BA Province (C & 439 90% 244 12.2 

A) 

1999 Dragados A del Grande B A 44 31% 39 

1999 EMOS Aguas Cordeillara 193 100% 345 N/A 

1999 Suez EMOS 957 42% 226 14.2 

1999 Suez EMOS 178 9% 196 12.4 

1999 Iberdrola ESSAL 94 51% 312 10.8 

1999 Thames & EDP ESSEL 113 45% 251 13.2 

1999 Suez EMOS 957 42% 230 14.3 

1999 AWG / Enersis ESVAL 138 40% 136 5.1 

1999 Gelsenwasser Hanse Wasser 355 75% 676 N/A 

1999 Vivendi / RWE BWB 1,749 50% 448 3.1 

1999 Azurix G M de Desarrollo 39 80% 64 2.2 

1999 Thames Izmit Su As 21 12% 146 N/A 

2000 Suez Manuas 

111 90% 51 3.1 

Saneamento 

2000 Thames ESSEL 73 26% 281 14.8 

2001 EVN Nosiwag 83 100% 184 5.5 

2001 Thames ESSBIO 336 51% 220 14.4 

2001 AWG / VE PVK 160 66% 101 2.4 

2001 IW / UU Tallinna Vesi 78 50% 186 N/A 

2004 Falabella ESSAT 74 100% 90 2.1 

2004 Falabella ESSAR 61 100% 55 2.0 

2004 Falabella ESMAG 35 100% 117 3.2 

2004 Veolia BVAG 450 75% 1,200 1.8 

2004 Veolia BVAG 450 75% 1,200 1.8 

2004 Veolia BVAG 450 75% 1,200 1.8 

2004 Veolia BVAG 450 75% 1,200 1.8 

2006 DM Consunji Maynilad Water 503 84% N/A N/A 

2007 Acegas APGA N/A 100% N/A N/A 

2008 Cascal Zhumadian Water 

Co 

2008 Cascal Yancheng Water 

Co 

Source: Envisager M&A Database 

18 51% N/A 6.0 

29 49% 100 6.1 

42 



Acquisitions of stakes in subsidiaries of listed companies and unlisted companies 

Examples here include the buying out of joint venture stakes (AAET, International Water, Cascal 

and China Water), along with buying out minority partners (SAUR), the outright acquisition of 

water assets held by a third party (Cambridge, Wessex, American WW and AquaSource), the 

acquisition of privately-owned companies (Utilities Inc, GH Holdings and Citizens Utilities) and 

non-core divisions from other water companies (Crea and Berlinwasser International). 

Completed acquisitions of stakes in subsidiaries, by bidding and target company, (USDm) 


(US$ m) 

Stake 

bought 

US$ per 

person 

Price / 

revenues 

1999 American WW AAET 32 50% 67 1.7 

1999 Edison Intl. Water 40 50% 70 N/A 

2000 Bouygues Crea 60 71% 30 1.7 

2000 Nuon Biwater Capital 130 50% 64 N/A 

2000 RWE China Water Co 70 49% 40 N/A 

2000 AWG Aguas Puerto 131 29% 179 6.7 

2000 Guangdong Inv GH Holdings 508 81% 123 1.9 

2000 Bouygues SAUR 158 13% 101 0.7 

2001 Nuon Utilities Inc. 405 100% 476 6.3 

2001 Bouygues SAUR 181 14% 108 0.7 

2001 American WW Citizens Utilities [1] 231 100% 330 N/A 

2001 American WW Azurix NA 160 100% 80 N/A 

2002 YTL Wessex Water 2,150 100% 581 N/A 

2002 Kelda AWW New Eng 120 100% 678 N/A 

2002 RWE Citizens Utilities [1] 859 100% 781 N/A 

2003 Sime Darby China Water Co 70 46% 43 N/A 

2004 CKI Cambridge 87 100% 301 3.4 

2004 Aqua America Heater Utilities 48 100% 320 N/A 

2004 Aqua America AquaSource 191 100% 382 N/A 

2005 Westpac Mid Kent Water 480 100% 820 5.6 

2005 Amga Aqua Italia 68 63% 348 2.2 

2006 FCC SmVAK 350 100% 315 4.4 

2006 Westpac South East Water 1,330 100% 885 5.9 

2007 Aqua America Utilities & Industries 51 100% 378 N/A 

2007 Aqua America Aquarion NY 7 100% 652 N/A 

2007 Macquarie Aquarion 760 100% 1,150 3.7 

2007 OTPP ASNSM N/A 100% N/A N/A 

Note: [1] Separate parts of the same company 


Examples of strategic stake acquisitions in listed companies 

Information on these activities is particularly poor, as companies are not always inclined to 

publicise such deals. These exceptions give an indication of the scope of activities that take 

place, usually referring to building up stakes in a company which has been already invested in 

(Aguas Andinas), a strategic relationship (Intan Utilities), a prelude to a bid (Acque Potabili) or a 

stake divestment by a previous owner to a third party (Northumbrian). 

43 



Completed acquisitions of strategic stakeholdings, by bidding and target company, (USD 

million) 


(USDm) 

Stake 

bought 

USD per 

person 

Price / 

turnover 

1999 ACEA Acque Potabili 10 11% 123 2.3 

1998 Veolia Intan Utilities 12 18% 111 3.0 

2002 Agbar Aguas Andinas 210 9% 229 16.5 

2004 Agbar Aguas Andinas 167 15% 109 3.2 

2005 Ontario Teachers Northumbrian 460 25% 236 2.8 

2006 RBS Southern Water N/A 25% N/A N/A 


Looking back, at least 14 companies have changed hands twice during this period, ranging from 

Thames Water and American Water Works at one extreme, to Cambridge and Mid Kent at the 

other. This is likely to be a unique era of corporate activity for the sector. 

LOCAL COMPANIES – A SUBTLE SIDE OF PPP 

Information continues to emerge about smaller and lower profile companies which continue to 

merit keeping at least a watching brief on them. Their very nature (unlisted, usually privately 

held and locally based) means that information about them can be patchy and at times 

inconsistent. This is highlighted by the somewhat volatile nature of some companies reported as 

active in the Russian Federation. This year, Han’s Technologies has continued to gain contracts 

in China and has been promoted to a full entry. Others such as RUAS of France have left 

because they have been acquired by a larger player. Then there are the potentially major 

players who for now have a low profile. The best example of this is Multiplex of Switzerland, 

which has gained the Tbilisi water concession. 

To merit inclusion in the following list, companies need to have gained at least one water or 

sewerage contract since 1987 which is still active and serves at least 10,000 people. 

The last few years have been marked by the increase in the quality of local companies as well 

as their quantity. This reflects a shift away from opportunists (water vendors who provide a 

debatable quality of service based on exploiting deficiencies in the utility’s service) to enablers, 

companies often working with the utilities to expand and improve services both in currently 

served areas and where no formal service previously existed. 

The emergence of formal service provision 

Where no water and sanitation services are provided by a utility, people still need these services 

and in many cases, they turn to informal service providers. Informal service providers give a 

rudimentary service and usually a costly one. The fact that people have to pay for such services 

means that there is considerable potential to replace these services with small, locally based 

concessions and operations contracts, sometimes working as sub-contractors for incumbent 

utilities. A survey by the World Bank (Triche T, Requena S & Karuiki M (2006) Engaging local 

private operators in water supply & sanitation services. Water Supply & Sanitation Working 

Notes, No 12, December 2006, World Bank, Washington DC, USA.) considers how local private 

operators can be brought in to address these service gaps. A variety of operational models 

supported by the World Bank in five countries in Asia, Africa and Latin America were examined. 

Country Contracts People served 

Cambodia 18 133,000 

Colombia 20 1,242,000 

Paraguay 6 28,000 

The Philippines 22 83,000 

Uganda 10 173,000 

Total 76 1,659,000 

44 



These are not headline grabbing contracts. As the figure below shows, the intensity of private 

sector participation is appreciably more constrained than in the capital intensive, concessional 

models usually associated with the World Bank. 

Allocation of financing and management mechanisms 

Source: Triche T, Requena S & Karuiki M (2006) 

Approximately 1.6million people (21,800 people per contract) have been connected to these 

services, a small proportion of the global PSP coverage, but in the context of these countries 

and markets, a significant figure. The survey ended in September 2005 and may not reflect the 

current performance of the contracts. To date, their performance has been encouraging. It is 

notable that in none of these cases is the operator exposed to foreign currency perturbations. 

Indeed, financing risks were generally limited, with only the BO contracts in Paraguay and the 

DBO contracts in Cambodia having private operators carrying a partial financial risk. 

The effective tariffs charged ranged from USD0.39-0.50 per m 3 . In all cases, these were 

developed with affordability in mind. With some exceptions, there was no minimum water 

consumption. In Paraguay, a lower actual tariff with a high minimum usage per month meant 

that the real tariff of USD0.20 per m 3 was in fact USD0.48 per m 3 as water used was usually 

less than the minimum. 

Second tier companies continue to emerge 

The next step up is companies being identified as holding individual contracts. 

45 



In previous editions, we have noted some smaller, local players. This is an attempt to list local 

companies which have gained formal PPP contracts. The initial survey identified 97 companies 

in 17 countries. This excludes companies with joint ventures with the major international 

companies (e.g. the Eurasian Water Partnership in the Russian Federation, which is a Veolia 

joint venture). In this edition, 104 companies have been identified (some of those initially 

identified have been taken over or have left the sector). Further details about companies 

(population served and so on) will be included in the country entries. 

The number of companies here operating internationally is small. One was identified operating 

in China (North American Envirotech), Vitens (the Netherlands) in Ghana, Aguas de Portugal 

(Portugal) in Brazil and Mozambique and NTR (Denmark) in the Maldives. Vitens and Aguas de 

Portugal are public companies, but these activities were gained as PPP projects on competitive 

tenders. 

The impact of these companies ought to be put into their global context. The 778 contracts 

covered in the Envisager database that relate to companies with full entries in the Yearbook 

cover 603.2million people with an average of 775,000 people per contract, compared with 

32.0million people covered by the 156 contracts held by these companies, with an average of 

212,000 people per contract. 95% of people served by PSP contract awards identified here 

have been by the 150 companies with entries in the Yearbook, with 5% served by the other 104 

companies listed below. 

Smaller company list 

Project Country Company Parent Country 

Argentina Benito Roggio e Hijos Argentina 

Argentina Conteras Hermanos / Esuco Argentina 

Argentina Phoenix / Sagua Intl / Simali Argentina 

Argentina Sagua International Argentina 

Argentina Sudamerica de Aguas Argentina 

Brazil Aguas de Portugal Portugal 

Brazil Aguas de Santo Antonio Brazil 

Brazil Aguas de Tucurui Brazil 

Brazil Aguia Branca Brazil 

Brazil Carioca Christiani-Nielsen Brazil 

Brazil Construtora Gautama Brazil 

Brazil Construtora Nascimento Brazil 

Brazil Emissao Engenharia Brazil 

Brazil Emp Sul-Americana de Montagem Brazil 

Brazil Empresa de Saneamento de Nobres Brazil 

Brazil Global Enghenharia Brazil 

Brazil Globalbank Consulting Brazil 

Brazil Hidrogesp Brazil 

Brazil Materia Perfuracao de Pocos Brazil 

Brazil Matonense de Saneamento Brazil 

Brazil Novacon Brazil 

Brazil Obrecht Engenharia Ambiental Brazil 

Brazil Perenge Engenharia Brazil 

Brazil Primaverra do Leste Brazil 

Brazil Telar Brazil 

Brazil Villa Nova Engenharia Brazil 

Chile Grupo Hurtado Chile 

Chile Hidroscan Chile 

Chile Vicuna Chile 

46 



China Chongqing Kanda Env China 

China CNA Group China 

China Dalian Dongda Env Eng China 

China DKLS Industries Bhd China 

China Hainan Runda Ind China 

China Hana Corp China 

China Hong Yuan Ju China 

China Jiangsu Taizhou Water China 

China Jinan Shifangyuantong China 

China Lianheruitong Water China 

China Long Quan Group China 

China North American Envirotech USA 

China Qingdao Huaou China 

China R&F Properties Group China 

China Rong Group China 

China Shanghai Fudalefumen China 

China Shanghai Qingyue Inv China 

China Sino-Dutch Water Investment Co Netherlands 

China United Envirotech China 

China Wai Kee Holdings China 

China Weihai Dean Water Eng China 

China Yiqi Group China 

Colombia Acuasasa Colombia 

Colombia Acueductos y Alcantarillados Sostensibles Colombia 

Colombia Aguas de la Costa Colombia 

Colombia Aguas de la Guajira Colombia 

Colombia Aguas de la Mojana Colombia 

Colombia Aguas de la Ribera Colombia 

Colombia Aguas del Llano Colombia 

Colombia Aguas Kpital Colombia 

Colombia Aguascol Colombia 

Colombia Conhydra Colombia 

Colombia Consorcio Almafama Colombia 

Colombia Construcciones Insaca Colombia 

Colombia Consultores de Desarrollo / Hidrotec Colombia 

Colombia Emas / Ingenieria Sala Colombia 

Colombia Empresa de Aguas de Giradot Colombia 

Colombia Francisco Velasquez Inginieria Colombia 

Colombia Grupo Colombo-Cubano Colombia 

Colombia Grupo Empresarial Energic Colombia 

Colombia Grupo Hydros Colombia 

Colombia Ingenieria Sala Colombia 

Colombia Ingenieria Total Colombia 

Colombia Operadores de Servicos Colombia 

Colombia Presea Colombia 

Colombia SIE de Colombia Colombia 

Colombia Unisaguas Colombia 

Ecuador Leonardo Armijos Luna Ecuador 

France Alteau France 

France Sogedo France 

France STURNO France 

France Ternois Epuration France 

47 



Georgia Multiplex Solutions Switzerland 

Ghana Vitens Netherlands 

Indonesia PT Buana & PT Dewata Arta Kharsima Indonesia 

Kenya Gauff Ingenieure Germany 

Maldives NTR / HOH Denmark 

Mexico Atlatec Mexico 

Mexico Bufete Mexico 

Mexico Coplata Mexico 

Mexico Grupo Protexa Mexico 

Mexico Solaqua / TCS Enterprises Mexico 

Mexico Wheelabrator / Coplata USA 

Mozambique Aguas de Portugal / Mazi Mozambique Portugal 

Philippines DM Consunji Philippines 

Poland Aquarius Poland 

Russia Alfa Group Russia 

Russia Alpha-Eco Group Russia 

Russia Eurasian Water Partnership Russia 

Russia Russian Utility Systems Russia 

Russia Syzranvodokanal Russia 

South Africa Amanz' aBantu Services / Uzinzo South Africa 

Thailand EGCO Thailand 

Uruguay STA / Benencio Uruguay 

Venezuela SNC Lavalin Canada 

REFLECTIONS ON RECENT EXPERIENCES BY INTERNATIONAL PLAYERS 

These comments are edited and updated from a background paper the author prepared for the 

United Nations for its 2008 Trade and Development Report (UNCTAD (2008) TDR 2008: 

Commodity Prices, Capital Flows and the Financing of Investment, UNCTAD, Geneva). 

References can be found at the back of this Yearbook. 

What are the pros and cons regarding PSP and international water companies? Using PSP in 

this context allows for the mobilisation of new sources of funding and management experience 

and therefore assists Governments struggling to mobilise new sources of funding. Against this is 

the inherent need for companies to make suitable returns on their investments and the need to 

balance the returns made against the benefits accrued by the government and the risks carried 

by both sides in undertaking such a contract. 

The role of PSP in attaining national development plans 

The motivation for PSP lies in the gap between the ambitions of international initiatives such as 

the UN’s ‘Development Decade for Safe Water and Sanitation’ (1981-90) and the ability to 

deliver their objectives. The Decade was a success in that the estimated proportion of people in 

urban areas with access to safe water rose from 75% to 95% (WHO, 2000), but in terms of 

access to water in developing economies the UN noted that another 961million people would 

require access to improved water in urban areas by 2015 (UN 2005). PSP played a minimal role 

in the 1981-90 Decade (Owen, 2007). The UN Millennium Development Goals (Goal 7 target 9 

– to halve the number of people without access to safe drinking water by 2015) and the World 

Water Vision (universal access to improved water and sanitation by 2025, WSSCC, 2000) have 

been drawn up to maintain the momentum towards improving access to water, along with the 

UN’s ‘Water for Life’ Decade of action 2005-15. The reason for the continuing challenges lies in 

population growth and urbanisation, along with increasing demand for urban water from sources 

that have either been contaminated or are facing over-abstraction. 

Commodities and efficiency 

48 



By commoditising water, (treating it as an economic good and charging to recover the costs of 

service provision) funding can be made available for improving water services and its prudent 

use is encouraged. Private sector participation has been used by a number of countries in order 

to support attaining these objectives. The reasoning behind this has been access to new 

sources of funding along with the scope for improved efficiency of service delivery, linked to a 

series of performance targets. Between 1995 and 2005, World Bank supported PSP and 

Privatisation (in Chile) projects involved investment of USD12.8billion for water only contracts 

and USD26.8billion for water and sewerage contracts (World Bank 2005). There are a number 

of studies pointing towards efficiencies attained by the private sector, for example, research by 

Europe Economics (Europe Economics 2003) for Ofwat the England & Wales’ water regulator 

found that ‘privatised infrastructure companies have reduced unit operating expenditure by 

some 1.25 to 3.5% per annum more than might have been expected in the absence of a 

“privatisation effect” … greater efficiency following privatisation and the introduction of incentive 

regulation.’ Indeed, the report identified a scope for 1.5-3.0% per annum real base operating 

and capital maintenance expenditure and 2.0-4.0% per annum real base service operating 

expenditure from 2003-13, 14-24 years after the companies were originally privatised. 

PSP as a public health driver 

Another factor favouring PSP can be its impact on public health Galiani et al (2005) found that 

child mortality in Argentina fell by 5-7% during the 1990s in areas of Argentina where water 

services were run by the private sector compared with those where services were still run by the 

public sector, with a 24% fall in the poorest municipalities. It is evident that such an outcome will 

only take place when suitable mechanisms exist to ensure affordability and prevent 

disconnections for non-payment taking place. 

As noted by Budds & McGranahan (2003) the 1992 Dublin principles were influential in 

establishing a sympathetic climate towards PSP. Principle 4 states that ‘Managing water as an 

economic good is an important way of achieving efficient and equitable use, and of encouraging 

conservation and protection of water resources (WMO 1992). 

Concessions and local capacity building 

A number of cases have emerged where water concessions have been used to enable a 

country to develop its water manage capabilities with the aim of becoming a regional centre. In 

the Philippines, Manila Water having been listed on its local bourse is now being developed to 

participate in bulk water projects in the Philippines and water O&M contracts in Asia (Manila 

Water, 2006). Morocco’s ONEP seeks to develop the country’s experience with PSP so that the 

country can in turn become a regional leader in O&M and technical support projects in Western 

Africa (ONEP 2006). ONEP’s experience comes from its relationship with the LYDEC 

concession serving Casablanca and a number of other concessions, with LYDEC again having 

been listed on its local course. 

The need for attractive contract exit routes 

To date, four concessions which were awarded to international companies have seen a local 

initial public offering (IPO): EMOS (Chile, 2002-04), LYDEC (Morocco, 2005), Tallinna Vesi 

(2004) and Manila Water (Philippines, 2006), along with a mooted IPO for Maynilad Water 

(Philippines, originally proposed for 2008). An IPO was envisaged for Aguas Argentinas, before 

contract conditions deteriorated inexorably. A local IPO transfers at least part of the 

shareholding in the contract from international to local hands and devolves corporate activities 

towards the local level. They can also act as a material boost to local bourses because a well 

managed water utility is typically regarded as an attractive, low risk investment. 

Pro-poor policy implementation 

There is a considerable debate about the applicability of rising block tariffs (Casablanca and 

Malaysia,) versus the use of direct subsidies (Chile and Macao). Rising block tariffs work on the 

principle of low water usage per account having a low fixed cost per unit of water, which rises as 

the user consumes more. This is meant to mean that water for necessity is relatively cheap and 

49 



water for luxury is relatively expensive. In practice, rising block tariffs are distorted as everybody 

benefits at the lower end so that the upper end needs to compensate for this. But better off 

people may have private wells (Aquafed 2007); while group purchases by less well off people 

will mean they are buying water at a higher price (HDR 2006). In Chile, government intervention 

ameliorated problems when, after demonstrations in April 2001, the government started a ‘water 

stamps’ scheme to allow low-income residents to recover part of their water fees (Castro, 2006). 

In Manila and Jakarta a regulatory environment was implemented that makes it worthwhile for 

the concession company to invest in low cost approaches towards serving informal and less 

well off communities. This has become a powerful tool for service extension, providing a basic 

access to households and household groups to a continual supply of fully potable water. The 

company needs to be able to afford it within the context of the concession and the deliverables 

need to justify these incentives, as the returns for these projects will typically be lower than for 

providing water to more well off customers. 

Experiences to date suggest that there is a greater scope for companies in addressing the 

poorer people in a city which has some wealth (e.g. informal settlements and less well off 

districts) than a city with a low overall capacity to finance service development and extension. 

For example, Manila Water serves both the city’s business districts as well as substantial 

informal settlements. The objection to this approach is that it effectively constitutes ‘cherry 

picking’ of the most attractive contracts (Budds & McGranaghan, 2003). 

The challenge of connecting informal settlements 

It is the author’s contention that for a municipal government, there may be no particular 

incentive to provide adequate water access for their informal settlements. Its inhabitants are 

effectively disenfranchised and offer no political benefits to the supplier. For the private sector, 

their political importance is immaterial; when people are willing to pay a fair price for suitable 

water supplies within a suitable regulatory framework, there is scope to develop a business 

case for doing so. 

Access to and hours of water supply before and after the contract 

Contract 

Households with piped 

water 

Hours 

supply/day 

(Operator) Before After Before After 

Period 

Amman, Jordan (Suez) 90% 100% 4 9 2000-05 

Barranquilla, Colombia (Tecvasa) 60% 89% 19 23 1990-05 

Cartagena, Colombia (Agbar) 74% 95% 17 24 1995-05 

Senegal (SAUR) 59% 73% 16 22 1995-05 

Zambia (SAUR) 100% 100% 13 18 2000-04 

Riskong K, Hammond M E & Locussol (2007) 

Do companies contribute towards service extension? 

Given the importance attached to service extension as a justification, an estimate of the number 

of people actually connected by the leading international water companies is of some 

importance. The following table is based on publicly available data on the performance of a 

number of major water concessions. In a number of cases, such as Thames Water in Jakarta, 

updated numbers have not recently been made available. 

Service extension and the international players, 1995-2007 (million new people served) 

Suez 11.0 

Veolia 6.5 

United Utilities 2.5 

Bouygues 1.0 

Thames 0.5 

Others 0.8 

Total 22.3 

50 



In reality, full reporting of service extension data has not taken place. It is likely that the real 

figure is between 25.0 and 27.5million people via a smaller number of connections. In addition, 

population growth within a contract’s operating area means new connections being made and 

more people served per connection, but these will not usually be classified as service extension. 

Service extension also excludes people being provided water by bulk water provision and water 

treatment contracts, where the company is mobilizing new water resources but is not 

responsible for distributing water to the customers. 

Suez has provided additional access to water for nearly 8million people in developing countries 

and a further 1.8million via standpipes in South Africa by 2005 and 9.2million home 

connections and 1.8million standpipe connections by 2007 (Suez, 2007 & Aquafed, 2007). 

While Veolia supplies water to 9million people in developing economies in Africa and Asia 

excluding China, including 3.5million people who have benefited from new household and 

standpipe connections 1 (Veolia, 2007). 

International companies have played a significant role both in the global impact of water PSP in 

developing economies and in assisting to deliver service extension. But in the context of the 

needs of the Water & Sanitation Millennium Development Goals, let alone the World Water 

Vision, it can be argued that they need to be encouraged to make a greater contribution. These 

are some personal observations of the author. 

Some water PSP case studies in service extension 

Casablanca – block tariffs and service extension 

In 1997, Lyonnaise des Eaux de Casablanca (LYDEC) lead by Suez (France) was awarded the 

30 year Urban Community of Casablanca (UCC) concession contract. During 1998-06, 

LYDEC’s water and sewerage activities accounted for 30-35% of LYDEC’s turnover and 60- 

70% of investment, reflecting the need to upgrade and extend the city’s water and sewerage 

services. By 2004, leaks generating 25million m 3 pa of water losses had been repaired, 

equivalent to the water needs of 800,000 people. 

Service development 1997 2002 2005 

Water connections 440,000 590,000 710,000 

Unaccounted for water 38.9% 27.7% 22.2% 

Application of cross subsidies is via block tariffs. Block tariffs are based on consumption per 

month, with the first 8m 3 costing 2.92 Mdh/m 3 (USD0.39) and subsequent usage above this 

figure rising in thee stages to 13.25Mdh/m 3 (USD1.79) for water above 40m 3 per month. 

Most of the water (649million m 3 out of 814million m 3 in 1999) is bought from ONEP, the 

National Drinking Water Administration, for 3.95Mdh/m 3 (USD0.53) meaning that water for 

essential use is directly subsidised by LYDEC. As a result, 50% of customers pay less than 

USD3 per month. At the start of 2007, 145,000 low income households without adequate 

access to water and sanitation were identified. LYDEC plans to connect them by 2010 at a total 

cost of USD137million. 

14% of LYDEC’s equity was sold on the Casablanca Bourse on 18 th July 2005, 80% of the 

shares being bought by local investors. Suez continues to hold 51% of LYDEC, with the 

remaining 35% being held by Moroccan institutions. 

Sources: Djerrari, F (2003) Best practice in urban water resource management: Contribution of 

LYDEC in Casablanca, World Bank Water Week, Washington DC, USA, 4-6 th March 2003 

De Cazalet, B (2004) The role of Private Sector Participation in developing the water sector in 

the Mediterranean Region: The example of Casablanca, FEMIP Expert Committee, Amsterdam 

25-26 October 2004. 

51 



Cluzeau C & Mathys A (2007) Morocco: OBA Subsidies to Water & Sanitation Connections in 

Poor Peri-urban Areas - The GPOBA pilot and the full scale INMAE project in the Greater 

Casablanca 

Suez Environment (2006) Sustainable Development Report 2005 

Manila Water – serving formal and informal communities in Manila 

Metro Manila covers 11.5million people in four cities and 37 municipalities, with the population 

growing at 3% each year and its population is expected to double by 2025. 40% of those within 

the area currently live below the World Bank’s definition of the poverty line. The privatisation of 

MWSS was arranged by the World Bank’s IFC to mobilise USD6billion of investment for 

upgrading and expanding the water distribution system and in the longer term, to install a 

modern sewerage and sewage treatment infrastructure. MWSS was split into two zones, each 

with a 25 year BOT contract. MWSS remains as a regulatory overseer for the concession 

holders for the life of the contracts. 

The concession for the eastern sector was awarded to the Manila Water Company (MWC) a 

joint venture between Ayala (Philippines) and International Water (originally Bechtel (USA) and 

United Utilities (UK) with Bechtel leaving in 2002) who started their concession in 1998. Since 

the concession started, the number of people served in the zone has increased from 3.5 to 

5.0million. By 2022, it is estimated that the zone will have 8.5million people. In 2007, the 

concession was extended for a further 10 years to 2032. 

Manila Water 1997 2007 

Population 4.6million 5.3million 

Households served 325,000 986,000 

Access to water supply 58% 99% 

Access to 24 hour supply 26% 99% 

Staff / 1,000 connections 9.8 1.7 

Billed water (MLD) 440 1,040 

Non revenue water 63.0% 23.9% 

All water supply targets set by the IFC have been met or exceeded to date. In March 2005, the 

company was listed on the Philippine Stock Exchange, 41% of the shares held by outside 

investors, 32% by Ayala of the Philippines, 19% by International Companies (United Utilities of 

the UK and Mitsubishi of Japan) and 7% by the World Bank’s IFC. 

The Tubig Para Sa Barrangay (TPSB) programme is designed to extend services into the 

barrangays (informal settlements) in the zone. It allows several poor families in depressed areas 

to share the cost of a single MWC water meter. By January 2008, 644 projects had completed, 

connecting a total of 1.3million people; 1.02million by the end of 2006 and a further 260,000 

during 2007. Between 2008 and 2012, the company plans to connect a further 1.0million people 

in Rizal Province to the north of its central concession area. At the start of the programme in 

1998, there were 39,000 cases of diarrhoea in the service area, compared with 22,000 in 2007 

and 25,000 in 2006. 

TPSB programme 2000 2002 2004 2006 2007 

Total household connections (‘000) 401 470 556 892 986 

TPSB connections (‘000) 27 63 123 170 214 

TPSB served population (‘000) 166 383 740 1,020 1,300 

Vended water typically costs 100 pesos per m 3 , seven times higher that charged by Manila 

Water under the scheme. During 2004, a 36% reduction in infant related mortality due to 

diarrhoea occurred due to the improved availability of potable water in the zone. 99.6% of water 

supplied by Metro Manila satisfied potable water standards in 2004 and has seen a 100% 

compliance rate between 2005 and 2007. 

Manila Water (2005) Sustainability Report 2004 


52 




Manila Water (2008) Annual Report 2007 

Bolivia: Low cost approaches in La Paz and political priorities 

In 1997 a 30 year water and sewerage concession for La Paz & El Alto, serving 1.48million 

people was awarded to Aguas de Illimani (AISA). The consortium was led by Suez of France 

(55%), along with Bolivian and Argentinean investors. 

AISA's contract in La Paz was specifically designed to pre-empt affordability concerns. By using 

labour provided by customers, the cost of connecting poor areas has been reduced. While 45% 

of the population of La Paz live below the poverty line, the proportion in El Alto is 73%. For low 

income families in El Alto, the connection charge was up to USD315 against the Government 

standard connection fee of USD455. Connection costs in El Alto are repaid by the community 

over five years via an interest free loan, allied with micro credit for internal plumbing. Community 

involvement (e.g. choice in siting pipes) was paramount, along with gaining community support 

from the outset. Similar projects only took place where at least 60% of the community supports 

them. Families not connected to the network pay an average of USD4.78 per month for water 

(against an average of USD1.55per month for connected families) at USD2.38 / m 3 . This data 

was collected in District 7 during December 2004. During 2004, 373,000 people were connected 

to drinking water supplies. 

Coverage and people served by new connections, 1997-2004 

1997 2004 Connected New connections 

La Paz 92% 100% 174,000 30,000 

El Alto 82% 98% 199,000 57,000 

Suez (2005a) 

By the end of 2005 a total of 97,031 families (608,000) people had been connected to the water 

network (Suez 2006). Service delivery and affordability under the concession can be judged by 

contrasting AISA’s performance in 2003 with that of SEMAPA, the utility serving Cochabamba, 

the city which cancelled a water concession in 2000. 

2003 performance AISA SEMAPA 

Drinking water coverage 98.85% 68.72% 

Average water availability 23.96 h/day 14.40 h/day 

Tariff (USD) USD0.22 / M 3 USD0.27 / M 3 

Tariff (BOL) BOL 13.32 / M 3 BOL 24.50 / M 3 

Source: Superintendencia de Saneamiento Basico (SISAB) cited in Suez (2005a) 

Rates are determined by SISAB, the Government regulator. In La Paz and El Alto (and some 

other cities including Santa Cruz), they are calculated in USD while in Cochabamba, they are 

calculated in BOL. Using bilateral funds provided by the Swiss Government and USD0.4million 

from AISA, additional domestic connections have been provided to areas outside El Alto’s 

service area. 

The current status of the contract is unclear because of protests that AISA is not connecting 

enough people outside the contract’s service area (an estimated 200,000 people have moved to 

these areas in recent years from the countryside) and changes in the tariffs due to the 

depreciation of the Boliviano against the US Dollar. 

In January 2006, Bolivia’s President Morales created a water ministry charged with 

renationalising water operations. The La Paz and El Alto concession was targeted, as the sole 

major concession in Bolivia. Abel Mamani, the water minister, previously ran Fejuve, the anti 

private sector pressure group operating in La Paz and El Alto. 

53 



Sisab, the Bolivian basic services regulator was meant to produce an audit about AISA’s 

performance to justify the concession’s rescindition. It is understood that this audit had shown 

that AISA has performed at least to expectations. Indeed, Sisab gave AISA an A+ rating in April 

2006 and qualified it as Bolivia’s “best firm” (BNA 2006). AISA handed over the concession in 

October 2006. 

Business News Americas (2006) Fejuve prepares to take over Aisa, BN Americas 7 th 

September 2006 

Suez (2005b) Activities and Sustainable Development Report 2004 

Suez (2005a) ‘Aguas de Illimani’s achievements’ February 2005 

Suez (2006) Water for Alll 

54 


PART 2: COUNTRY ANALYSIS 


55 


ARGENTINA 


ARGENTINA 

Economics (2006) 

GNI per capita 

USD5,150 

GNI per capita (PPP) USD15,390 

GDP in Agriculture 9% 

GDP in Industry 35% 

GDP in Services 56% 

Regulation and management 

Communities with a population of more than 15,000 are covered by the Programa Nacional de 

Optimización, Rehabilitación y Ampliación de Servicios de Agua Potable y Alcantarillado Claocal 

(PRONAPAC). This programme seeks to provide universal water provision and sewerage services on 

a financially self-supporting basis through the encouragement of private sector participation and is 

being supported by the World Bank. The Programme for Drinking Water and Sanitation (Préstamo 

BID857-OC/AR) covers communities with a population of 500-15,000. It seeks to develop a suitable 

level of service to be provided by the municipalities. For smaller communities, the Basic Drinking 

Water and Sanitation Programme (PASPAyS) is concentrating on public health concerns. 

Population 

2007 (million) 38.4 

2020 (million) 44.5 

Urbanisation in 2007 91.8% 

Urbanisation by 2020 93.8% 


Urban Data (2004) 

With improved drinking water 98% 

With household drinking water NA 

With improved sewerage 83% 

With household sewerage 

NA 

With 2 0 sewage treatment 10% 

Private sector participation 

Until 2002, PSP was at the heart of the government’s plans for universal water and sewerage 

coverage in urban areas. In 2004, some 16.2million of the people living in urban areas of Argentina 

(33million people) were served by the private sector, excluding the cancelled Tucuman concession 

(0.8million people). Over the next four years, this picture has changed. 

Development of water and sewerage, 1980-2001 

Census year Wate Sewerage 

1980 60 34 

1991 68 33 

2001 78 42 

In Argentina PSP was supported by the World Bank and IMF reforms and a pro PSP policy under 

Carlos Menem. Argentina underwent a financial crisis during the 1980s which meant that new 

investment was not possible and this in turn encouraged a PSP programme. The utility serving 

Buenos Aries was seen as performing poorly with 45% distribution losses (Zerah and Graham, 2001), 

excessive staffing and management hampered by political appointments and political intervention 

(Lindfield, 1998). The World Bank supported the development of a PSP Commission and the 

Government set up ETOSS, a regulatory agency (Lindfield, 1998). During the same time, smaller 

concessions were developed and awarded to local companies such as Latin Aguas. 

Freshwater 

Annual availability (1998) 694.0km 3 

Per capita 19,212m 3 

Annual withdrawal (1985) 28.6km 3 

Domestic (1987) 16% 

Industrial (1987) 9% 

Agriculture (1987) 75% 

56 


ARGENTINA 


Groundwater 







A shift from international to regional players 

Since 2000, South Water of Argentina bought out the Azurix stakes in the SAUR led consortia. 

Another local company, Latin Aguas has become a major regional player, operating three 

concessions in northern Argentina. 

The World Bank's International Centre for Settlement of Investment Disputes (ICSID) ruled in 

July 2006 that the Argentine authorities are to pay USD165million compensation to Azurix (now 

Enron) for the cancellation of the Buenos Aires contract in 2002. This is 29% of the USD565million 

Azurix claimed for the USD438million concession fee paid in 1999 and capital works carried out. 

Veolia and Tucuman – Political change and contract change 

Generale des Eaux (now Veolia) was awarded the Companhia de Aguas del Aconquija (CAA) 

concession for water and sewerage services to the city of Tucuman in 1995. The contract was 

awarded by the Province’s governor, a Peronist. During the first two years of the contract, CAA 

repaired facilities at 400 sites, boosting potable water treatment capacity by 15%. In early 1996, a new 

governor was elected, who adopted an anti-PSP approach. When Veolia sought to have the 

concession’s tariffs raised to cover investment work, the governor encouraged residents not to pay 

their bills and sought to have the concession rescinded. In December 1996, under the aegis of the 

World Bank’s International Centre for the Settlement of Investment Disputes (ICSID) and central 

government an agreement was reached and signed in April 1997. This was subsequently modified by 

the Province on a unilateral basis. In consequence, Veolia cancelled the contract in October 1998, at 

a loss of Fr190million (USD44.7million). Veolia filed a USD100million suit against the government and 

the ICSID arbitration panel has examined the case. 

Buenos Aires – The ‘British Invasion’ backfired 

In June 1999, Azurix (the water services subsidiary of Enron, USA) paid USD438.6million for a 90% 

holding in the concession company for two of the three regions of the Province of Buenos Aires. The 

British Management (from Azurix’s Wessex Water subsidiary) arrived on the anniversary of Britain 

winning the Falkland War and the local media referred to this as the ‘British Invasion’. During 2000, 

there were problems with contaminated water in Bahia Blanca. Azurix Buenos Aires agreed with the 

provincial regulatory agency not to bill residential customers for water services for a 50 day period 

during which the taste and odour of supplied water were allegedly unacceptable. These problems cost 

the company USD5.4million in revenues and additional costs. In March 2001, the dispute was 

apparently settled, with Azurix accelerating USD30million in spending to eliminate the problem. In 

October 2001, Azurix announced that it was withdrawing from the concession due to continuing 

problems with the provincial government. In February 2002, Azurix cancelled its contract with the 

Buenos Aires province, handling over the concession to the operational company. 

Aguas Argentinas – Foreign currency debt versus local currency tariffs 

Suez and Aguas de Barcelona’s consortium won the bidding for the central Buenos Aires concession 

in April 1993 with a bid 27% below the previous municipal tariff. The AA consortium took over a 

network with 45% distribution losses, providing water to 70% and sewerage for 58% of the city’s 

9million inhabitants. Suez gained a majority holding of the concession in November 1998 when 

Sociedad Comercial Del Plata (SCP) sold its 10.8% stake to Suez and Agbar. In 1993, total 

investment for the first five years was intended to be USD1,200million. By the end of 1999, 

USD750million had been invested in AA’s infrastructure. In 2001 Aguas Argentinas extended potable 

water and sewerage coverage in low-income areas as part of the company's USD190million 

investment during the year. Potable water access has already been connected to 22,000 residents. 

57 


ARGENTINA 


The Aguas Argentinas contract was based on performance targets (connections, levels of service, 

metering) rather than capital spending. A price formula was drawn up, which would be reviewed every 

five years (Lindfield, 1998). But ETOSS was staffed by former OSN employees and not formally 

qualified for their new roles. It has been suggested that the monitoring process was politically 

motivated (Zerah and Graham, 2001). 

In 1994, a tariff rise of 13.4% was imposed because the infrastructure condition was found to be 

worse than expected. Since 1996, AA and ETOSS went into a series of contract renegotiations over 

bill collection and charging. By 2001, it appears that AA was experiencing financial problems and from 

2001, ETOSS imposed a series of fines relating to AA’s performance as the company reduced 

spending in the wake of the 2001 economic crisis and the 2002 peso devaluation. Between 2003 and 

2005, further renegotiations took place but were inconclusive and the contract was handed back in 

2006 (Castro, 2006). Capital spending was being held back to retain the contract, as the economic 

crisis ruled out compensatory tariff increases as stipulated in the contract. In July 2004, an interim 

debt restructuring agreement was drawn up to create the basis for a normalisation of the contract in 

2005. However, at in September 2005, Suez announced that it would be exiting Aguas Argentinas. 

Suez and Agbar sold their stakes in Aguas Argentinas to the municipality in 2006. 

In 2001-02, the economic crisis exposed the danger of having a major concession based upon foreign 

currency debt. The collapse in the value of the Peso against the Dollar and the Euro forced Suez and 

Agbar to make write downs against these contracts. Suez had EUR480million in hard currency debt in 

Argentina at the end of 2001, the great majority relating to water investments. The company recorded 

a EUR80million loss on currency translations in 2001, along with releasing EUR118million in 

provisions. A further write-down of EUR500million (net of minorities and tax) was made in June 2002. 

In July 2004, an interim debt restructuring agreement was drawn up to create the basis for a 

normalisation of the contract in 2005. Agbar made a write down of EUR55million for its water activities 

in Argentina in 2002. In December 2003 Agbar wrote off all direct and indirect investments in 

Argentina and constituted provisions of EUR216million to cover the maximum loss that the Argentine 

operations might cause in the future. 

MAJOR CITIES 

City 2005 2015 Status 

Buenos Aires 12,550,000 13,067,000 Aguas Argentinas, 1993-2006 

Cordoba 1,423,000 1,552,000 Water and sewerage PSP, 1997 

Rosario 1,186,000 1,280,000 Water provision BOT, 1995-2006 

Mendoza 876,000 956,000 Water provision BOT awarded in 1998 

Tucumán 781,000 868,000 Water provision BOT, 1997-98 

Politics and the Peso Crisis 

The Aguas Argentinas, Aguas Provinciales de Santa Fe and Aguas Cordobesas concessions have all 

been particularly affected by the 2002 Peso Crisis. Meanwhile, the Aguas del Gran Buenos Aires 

concession was cancelled in July 2006. According to the provincial government, after six years of the 

concession, 71% of the people in AGBA’s concession region lack sewer connections and 64% 

drinking water. The province’s state water company Aguas Bonaerenses (ABSA) will now run the 

concession. SAUR renegotiated its Mendoza concession (the government currently holds 20% of the 

concession and in 2008 announced that it would like to acquire a further 20%) and the Catamarca 

concession may be revived. Proactiva’s 30 year Catamarca concession was awarded in 2000 and 

rescinded in 2005. The provincial government is currently looking for a 10 year renewable concession 

for the 200,000 people served by Aguas del Valle. It is expected that the concession will be awarded 

to a local group. 

58 


ARGENTINA 


Private sector contracts awarded (Please see relevant company entry for details) 

Location Contract Company 

Missiones 30 year water and sewerage concession Urbaser 

Balacarse 20 year water and sewerage concession Camuzzi 

La Planta 30 year water and sewerage concession South Water 

Bahia Blanca 30 year water and sewerage concession South Water 

Conurbano 30 year water and sewerage concession Aguas de Gran Bilbao 

Mendoza 95 year water provision BOT Obras Sanitarias de Mendoza 

Escobar Water provision concession Aguas de Valencia 

Laprida Concession, water & sewerage Aguas de Laprida 

Balacarse Concession, water & sewerage Aguas de Balacarse 

Rioia Concession, water & sewerage Aguas de La Rioia 

Salta Concession, water & sewerage Aguas de Salta 

Corrientes Concession, water & sewerage Aguas de Corrientes 

Problems endure 

Buenos Aires’ Aysa, was unable to satisfy demand at the beginning of 2008, due to insufficient 

service expansion investments. In essence the re-nationalised entity continues to face the problems 

experienced in 2006, when the Aguas Argentinas’ contract ended. 

Private sector company operations (Please see the relevant company entry for details) 

Company Parent company Population served 

(country) Water Sewerage Total 

Camuzzi Veolia (France) 45,000 45,000 45,000 

Conurbano AGB (Spain)/Sideco (Argentina) 1,700,000 1,700,000 1,700,000 

OS de Mendoza SAUR (France) 1,200,000 880,000 1,200,000 

AgVal Aguas de Valencia (Spain) 150,000 0 150,000 

Aguas de La Rioia Latin Aguas (Argentina) 201,000 122,0000 201,000 

Aguas de Salta Latin Aguas (Argentina) 1,017,000 675,000 1,017,000 

Aguas de Corrientes Latin Aguas (Argentina) 634,000 473,000 634,000 

Sources: 

Castro J P (2006) Water Services in Latin America: Public or Private? (Discussion of Four Case 

Studies). MSc Thesis, Erasmus University, Rotterdam 

Lindfield M R (1998) Institutions, Incentives and Risk Preparing Markets for Private Financing of 

Urban Infrastructure. The Australian Housing and Urban Research Institute. Brisbane, Queensland 

University of Technology / Erasmus University Rotterdam 

Zerah M H & Graham K (2001) The Buenos Aires Concession: The Private Sector Serving the Poor. 

In Asia, WASP-S. (Ed.) New Delhi, WSP. 

59 


AUSTRALIA 


AUSTRALIA 



USD35,990 





Water resources 

Australia has the lowest percentage of rainfall as run-off, the lowest amount of run-off, the least 

amount of water in rivers and the smallest area of permanent wetlands in the world. In addition, the 

country has the most variable rainfall and stream flow in the world, with inland waterways 

characterised by high turbidity (sediment loading) and salinity. The country is characterised by a 

dependence on groundwater resources and the over-development of its main river basins. As for 

renewable resources, 20% are fully utilised, and 15% of supplies come from groundwater resources. 

In much of inland Australia, groundwater is often the only practical water supply for the pastoral and 

mining industries and their associated communities. The Great Artesian Basin is of critical importance 

over a large area of eastern Australia. In the Perth region, groundwater constitutes about two-thirds of 

total water use and about 30% of the water supplied by the Western Australian Water Corporation. 

Australia has the highest per capita water storage of all countries, because of the variable rainfall. 

Australia’s storage capacity in major reservoirs totals some 81,000GL, or 3.7 times the developed 

resource. The bulk of water storage is concentrated in a few very large reservoirs. Australia’s 

10 largest reservoirs hold about 50% of national capacity. In New South Wales, the 10 largest 

reservoirs contain 90% of that state’s storage volume. In 75% of lakes and reservoirs, chlorophyll 

levels are regarded as excessive. There is a clear link between the concentration of phosphorus in 

these waters and the amount of chlorophyll (or algae) present. 

Australia's National Dryland Salinity Program estimates that over 20% of surface water resources in 

South Australia are too saline for human consumption. Lost water resources are valued at around 

AUD100million each in some local supply catchments. Other costs attributed to salinity are 

AUD130million per year in lost agricultural production and AUD100million pa in damage to 

infrastructure. An AUD300billion national water grid linking the wet northern regions of Australia with 

the dry south was unveiled by private sector groups in 2004. The idea would be to create a 

self-sufficient water management scheme for Australia that would be developed through optimising 

water resources and reuse while minimising losses. The water grid would have annual running costs 

of around AUD6billion. 

Water use 

Total water use of Australia's major cities remained static between 1991 and 1998 despite a 12% 

increase in the total number of properties supplied. If the effects of the drought in 1998 were 

accounted for, the overall water usage would have declined. User-pays pricing and demand 

management is delivering benefits in improving the efficiency of water use in urban communities. 

Unaccounted for water in Australian urban water networks is relatively low at 16% of total deliveries. 

Unaccounted for water includes unmetered supplies such as street flushing and fire fighting, together 

with leakage. 

Water usage in an average household of 2.8 people ranges from 263,000L pa for Sydney to 

700,000L pa for Darwin. Water is mainly used outdoors, with 30–55% spent mostly watering lawns 

and gardens. For example, water use in Darwin is about 700,000L pa for detached houses but 

323,000L pa for flats without gardens. 

Australia is wasting 92% of its city runoff water and 86% of its effluent water. The Commonwealth 

Scientific and Industrial Research Organisation (CSIRO) believes that storm water, treated sewage 

effluent, treated industrial discharges and household laundry and bathroom wastewater, could be 

used for irrigation of city parks, verges, ovals and other horticultural uses, along with a number of 

industrial processes, for cooling water, and for toilet flushing. Between 1998 and 2002, the re-use of 

effluent has doubled to 14%, due to AUD300million (USD163million) investment around the country. 

Savings of USD1-5 for every 10 kilolitres of water recycled are achievable. 

60 


AUSTRALIA 


Population 

2007 (million) 20.1 

2020 (million) 23.3 




Management 

A national strategic framework for water reform was agreed through the Council of Australian 

Governments in February 1994. This created a structured programme of reform measures to achieve 

more efficient and sustainable water resource use. State and territory governments have prime 

responsibility for water resource management and implementation of the reforms. The Federal 

Government has a complementary role in the reform process in providing leadership and facilitating 

implementation, in the interest of promoting national outcomes. The reforms were implemented over 

the period to 2001, covering both rural and urban areas and include measures in relation to water 

pricing, water entitlements and trading, environmental requirements, institutional reform, public 

consultation and education, and research. Good progress has been made in implementing the 

reforms in the short time since they were agreed. 

In 2003, the Senate environmental committee announced the recommendation of the creation of a 

national policy. This would set targets for regulating and improving supplies, set efficiency standards, 

prepare management guidelines and coordinate monitoring and funding arrangements. Suitable 

pricing levels need to be set to encourage conservation. While Australia is the world’s driest continent, 

the average price for domestic water is AUD1.64per m 3 (USD0.93), materially below the level charged 

in Japan, the UK and most of northern Europe. Perth was expected to need additional sources of 

potable water by 2005, Brisbane and Melbourne by 2015 and Canberra by about 2017. 

Water property rights systems are being addressed by the state governments under a framework of 

national principles. Transferable water entitlements are being developed so that they can be traded 

like any other commodity. In a system of transferable entitlements, water rights can also be bought or 

reserved to protect the environment. This market is discussed in some detail below. Most water 

agencies are adopting a full ‘user pays’ system, charging for water at close to its true supply cost, 

whereby all water consumed must be paid for. Environmental costs are based on a set of national 

principles on water for ecosystems and measures to promote integrated catchment management 

approaches. State governments have undertaken activities to promote water trading and initiated 

action to progress interstate water trading. Issues relating to groundwater management are also being 

examined through a national framework, as is management of stormwater and wastewater resources. 

Water quality is being addressed through the National Water Quality Management Strategy 

(NWQMS), which seeks to achieve a nationally consistent approach to water quality management, 

while allowing flexibility to respond to differing regional circumstances. The National River Health 

Program (NRHP) is developing the first national biological monitoring system for Australia's rivers, for 

the assessment of river health and related management action and State of the Environment 

reporting. Irrigation accounts for 70% of diverted river waters, with much of the remainder used for 

domestic consumption. 

The AUD2billion National Water Initiative unveiled in 2006 seeks to secure water supplies up to 2032 

through appropriate water pricing, ensuring that water entitlements are secure and tradable, along 

with interstate water trading and developing scientifically-based and transparent water planning, water 

resource accounting and the integrated management of water resources. The priority is to minimise 

losses and allocate existing water from the rural sector more efficiently through trading and improved 

price signalling rather than building dams or plant. 



With household drinking water N/A 



N/A 


61 


AUSTRALIA 


PSP plans 

According to the Australian Council for Infrastructure Development in 2003, since 1993, more than 

USD1,100million of public-private partnership contracts have been signed in the water industry. PSP 

is being carried out on a state by state basis, with a wide range of approaches and attitudes. Major 

water and sewerage projects currently under consideration number 12 and have a combined capital 

expenditure of AUD2.7billion. In Victoria, the State is seeking to privatise its water services in the 

medium term, while the 2003 Constitution (Water Authorities Bill) and the Water Legislation Bill are 

currently being debated to see if the private sector ought to be excluded from asset ownership. 

Currently, water resources are managed by three separate entities. Melbourne Water, the wholesale 

company for the city of Melbourne is currently to stay in state hands, with O&M outsourcing contracts 

being developed. This state is seen as the leader in market development terms. South Australia is 

seeking a BOOT approach. The Labor Party seeks to demonstrate that assets are returned to public 

ownership after a given time. In this context, United Water’s (UW) AUD1,500million 15 year BOOT for 

Adelaide is non-contentious, given that UW’s contract calls for a 20% fall in operating costs. Canberra 

is expected to privatise its water provision services in the medium term. Western Australia is 

developing a partnership basis, since it seeks to avoid too much contracting out, so that the 

municipalities hold on to their intellectual knowledge. The State of Queensland has restricted PSP to 

one contract (Noosa) to date and Brisbane Water remains a council entity. In New South Wales, 

Sydney Water has been corporatised and bulk water provision is carried out by the private sector (see 

city study below). The AUD1,200million sewerage scheme is open to tender, and various bids have 

been received, including one from Sydney Water. 

The cost of asset extension and enhancement 

The replacement value of Australia’s municipal and industrial water supply systems are estimated at 

AUD44billion, with a further AUD37billion for sewerage. While the quality of this infrastructure has 

been seen as improving in recent years by the engineering profession, none is seen as in a good 

condition (an ‘A’ rating, with ‘B’ being fair, ‘C’ poor and ‘D’ very poor): 

Condition of water infrastructure, 1999–2005 

1999 2001 2005 

Water C- C B- 

Wastewater D- C- C+ 

Stormwater N/A D C- 

Source: Engineers Australia (2005) 2005 Australian Infrastructure Report Card & The Institution of 

Engineers, Australia (1999) A report card on the nation’s infrastructure 

Spending on water and sewerage engineering and water storage systems such as dams is forecast to 

rise by 6.5% per annum in the long term: 

Water and sewage engineering costs, 1996–2012 (AUDm) 

1996-00 Actual 5,002 

2000-04 Actual 6,768 

2004-08 Forecast 10,201 

2008-12 Forecast 13,139 

Source: Construction Forecasting Council (www.cfc.acif.com.au), September 2005 forecasts 

Freshwater 







62 


AUSTRALIA 


Companies noted 

Along with Suez, Veolia and UU a number of local players have been identified. Actew, a publicly held 

utility and the private Australian Gaslight Company have formed a JV Actew AGL, Australia's first 

multi utility entity. Actew retains ownership of Australia Capital Territory's (ACT's) water and sewerage 

assets, with the JV being responsible for service provision. United Group acquired the Maffra contract 

from RWE in 2004 and seeks to develop its BOT activities. 

Groundwater 





The cost of taboos 

In July 2006, a referendum rejected plans to recycle wastewater in Toowoomba. The AUD73million 

scheme was intended to pioneer the use of treated effluent as the town’s main water supply. The town 

of 92,000 has no river and securing water supplies by conventional means are set to increase water 

costs by at least 50%. 

The cost of sustainability 

In May 2008, the government announced that it would commit AUD12.9billion pledged to protect 

water supplies in the face of climate change under its ‘Water for the Future’ programme. This includes 

AUD1.5billion in new urban water investment to help secure water supplies for homes and 

businesses; AUD1.0billion for the National Urban Water and Desalination Plan, AUD250million for the 

National Water Security Plan for Cities and Towns, and AUD250million for the National Rainwater and 

Greywater Initiative. A further AUD5.8billion will be invested in a rural water programme (including 

AUD1billion for water resource and recycling initiatives serving towns with less than 50,000 people 

and AUD450million for developing national water accounts and monitoring programmes) and another 

AUD3.1billion will be set aside to purchase some 30% of the country’s water rights to put back in the 

Murray Darling Basin waterways. 

Projects identified by Suez in 2007 

Water reuse 

Eastern water Reuse (Victoria) - 68billion L/year for AUD1.570billion (EUR965million) 

Western Sydney Reuse (NSW) - 18billion L/year for AUD300million (EUR184million) 

Hoxton Park Reuse (NSW) - 3billion L/year for AUD60million (EUR37million) 

Rouse Hill ext. Reuse (NSW) - 47billion L/year for AUD52million (EUR32million) 

Adelaide Reuse (SA) - 16billion L/year for AUD60million (EUR37million) 

Desalination 

BHP Olympic Dam RO (SA) - 24billion L/year for AUD300million (EUR184million) 

Sydney 1 RO (NSW) - 45billion L/year for AUD650million (EUR400million) 

Sydney 2 RO (NSW) - 135billion L/year for AUD350million (EUR215million) 

Suez believes that AUD7.4billion in projects are due to be put to tender in the medium term for water 

reuse and desalination. 

MAJOR CITIES 


Sydney 4,331,000 4,701,000 Corporatised, private bulk water provision 

Melbourne 3,626,000 3,933,000 SE Water O&M 

Brisbane 1,758,000 1,946,000 PSP under consideration 

Perth 1,474,000 1,627,000 PSP desalination contract 

Adelaide 1,134,000 1,230,000 One water & sewerage PSP 

63 


AUSTRALIA 


Sydney Water becomes State Water 

In July 2004, Sydney Water was corporatised and renamed State Water. It will have an independent 

regulator and has been ordered to attain cost savings of AUD1.7billion (EUR966million) between 

2004 and 2014. The entity has suffered from years of project delays, especially related to 

management problems. Sydney’s Waterplan 21, the development blueprint for achieving sustainable 

water consumption by 2021 has been scaled back due to the abandoning of proposals for industrial 

water recycling, citing inadequate demand and funding cutbacks. The pipeline was to have taken 

effluent from upgraded treatment plants in the satellite cities of Liverpool and Glenfield. By 2010, the 

government had aimed to recycle 83million L, but this target is now expected to be lowered. Sydney 

Water is increasing spending on its pipe network by 35% to AUD38million (EUR23.16million) pa, 

along with pipe inspections costing a further AUD36million (EUR21.9million). Around 200 leaks a day 

spring from the 21,000km of secondary pipes linking mains to households, while the overall rate of 

leakage was 10.7% as of in February 2004, or 188 Ml/day. About 7,000km of mains are inspected 

annually, with about 4,000km repaired each year, saving an estimated 38.8 megalitres of water each 

day. By June 2005, this saving is expected to rise to 60 megalitres. 

Private sector contracts awarded (Please see relevant company entry for details) 


Noosa Sewerage BOT Australian Water Services 

Sydney Water treatment BOT Australian Water Services 

Brisbane Sewage treatment DBO AWG 

Sydney Water treatment BOT North West Transfield 

Melbourne Water treatment BOT North West Transfield 

Melbourne Water & wastewater services Utility Services 

Adelaide Rural water treatment BOO International Water 

Noosa Water provision BOT CGE Australia 

Adelaide Water and sewerage concession United Water 

Ballarat Water treatment BOOT United Water 

Ballarat Sewage treatment BOT United Water 

Victoria Water provision to four towns Aqua Tower 

Townsville Water provision United Utilities Australia 

Perth Desalination Australian Water Services 

Pimpama Wastewater treatment Australian Water Services 


Company 

Parent company (country) Population served 

Water Sewerage Total 

AWS Suez (France) 1,000,000 35,000 1,035,000 

United Water VE (France) 1,310,000 1,200,000 1,310,000 

CGE Australia VE (France) 564,000 11,000 675,000 

NW Transfield United Utilities (UK) 530,000 0 530,000 

International Water United Utilities (UK) 189,000 0 189,000 

UU Australia United Utilities (UK) N/A N/A N/A 

Utility Services Leighton (Australia) 1,300,000 1,300,000 1,300,000 

Aqua Tower Cheung Kong Infra (Hong Kong) 50,000 0 50,000 

Water trading in the Murray River Basin 

Water trading has been used to encourage the optimal use of water for agricultural purposes in 

Australia, especially in the Murray-Darling River Basin in Victoria. Permanent and spot rights are 

traded on an exchange; the former giving the bidder the right to use the water in perpetuity, the latter 

is used to meet seasonal shortfalls. 

Permanent water trade by volume is considerably less in volume than temporary trade, but the price 

paid is higher, due to the nature of permanent water transfer and is much less affected by the 

seasonal allocations within authorities. These water licence values have risen from AUD180 per Ml in 

1994 to more than AUD2,000 per Ml. In wet years with full dams, irrigators gain a 100% allocation and 

utilise all the water covered by the licence. But in dry years, governments can reduce allocations. 

Prices are related to seasonal supply and demand, which also varies from year to year. Likewise, 

price is affected by the availability of water rights on the market. 

64 


AUSTRALIA 


Murray Irrigation Limited, spot prices, 1994-2008 

Season Total value Average Low High 

AUDmillion AUD/ML AUDML AUD/ML 

1998-99 0.83 15.33 6 65 

1999-00 2.24 37.68 21 85 

2000-01 1.12 15.49 8 30 

2001-02 2.85 40.82 20 75 

2002-03 12.64 228.09 100 350 

2003-04 5.71 70.13 50 150 

2004-05 4.97 73.35 44 200 

2005-06 4.21 44.59 34 140 

2006-07 12.28 370.73 70 800 

2007-08 7.85 680.04 200 1,100 

Murray Irrigation Limited, permanent entitlements, 1996-2008 (to 24 th July 2008) 

AUD per entitlement 

Year Entitlements Low High 

1996 1,168 213 300 

1997 1,512 252 338 

1998 1,816 270 450 

1999 1,155 400 415 

2000 1,679 280 420 

2001 310 360 375 

2002 2,914 190 450 

2003 3,724 300 500 

2004 1,717 407 550 

2005 2,496 540 600 

2006 6,499 550 800 

2007 14,752 500 1,100 

2008 19,514 525 1,123 

Murray Irrigation Limited regulates the provision of water to 2,400 farms in southern New South 

Wales. Water rights and permanent entitlements worth in the region of AUD80million have been 

traded over the past 12 years. 

Nationally, in 2001-02, 92% of water rights trading were for temporary allocations, reflecting the need 

for specific water provision services at a given time, rather than for general allocation allowances. 

Sources: 

Construction Forecasting Council (www.cfc.acif.com.au), September 2005 forecasts Source: 

Engineers Australia (2005) 2005 Australian Infrastructure Report Card 

The Institution of Engineers, Australia (1999) A report card on the nation’s infrastructure 

Suez (2007) Suez Environment in Australia, Press Kit, April 18 th 2007 

65 


BANGLADESH 


BANGLADESH 



USD480 

GNI per capita (PPP) 

USD2,340 




Management 

Water policy is managed by the Ministry of Water Resources, with a National Water Council 

responsible for all inter-ministerial cooperation. The National Water Plan, started in 1983, 

concentrated on flood control and an integrated water management policy was developed in 1995, 

leading to a National Water Policy and National Water Management Plan being adopted in 1998. 

These took into account municipal water supply and sewerage issues for the first time. The Policy 

aims to change traditional service delivery and increase sector capacity by decentralisation, user 

participation in planning, development, and operation and maintenance through local government and 

community-based organisations. The 2004 National Water Management Plan aims for 100% basic 

water supply and sanitation coverage in towns and rural areas by 2015. Government coverage targets 

for piped water supply in urban areas are 70% by 2010 and 90% by 2015, with 100% coverage to at 

least a basic minimum service level by 2010. 

Population 

2007 (million) 139.2 

2020 (million) 181.2 




Water provision 

In 1998, 87% of people in Bangladesh were within 150m of a tubewell and 97% of the population had 

what was seen as access to safe water for drinking. However, tube wells have their own problems. 

22% of the 7million tubewells in use suffered from arsenic contamination, along with bacterial 

contamination in 22% of shallow and 9% of deep tubewells. 

According to the World Bank 95% of Bangladesh's population has access to safe drinking water and 

almost half of the population has access to improved sanitation. The water data below is for urban 

household connections, which are appreciably less developed. However, Bangladesh cannot meet 

the Millennium Development Goal (MDG) target on sanitation if sanitation coverage is not raised by 

9.5% a year. During the first half of the 1990s, sanitation coverage increased by 7.5% pa. It has 

slowed down in the past decade and indeed urban coverage fell from 55% to 51% between 2000 and 

2004 due to rapid urbanisation. There was a fall in urban water coverage from 83% to 82% during this 

period for the same reason. 

The World Bank noted in December 2005 that urban water requirements are set to rise from 

10,000million litres a day to over 35,000million litres in the future. 



With household drinking water 24% 


With household sewerage 7% 


66 


BANGLADESH 


Water spending plans and performance 

The 2001 National Water Management Plan seeks to spend USD17.9billion on water and sanitation 

between 2001 and 2025, with USD1.5billion pa budgeted for the first five years. Revenues cover 64% 

of O&M costs, with revenue collection at 60-85% efficiency, with total non-revenue water at 40-60%. 

No city is able to offer 24 hour water service as a norm. 

Freshwater 

Annual availability (1998) 1,357.0km 3 






Groundwater 


Per capita 274m 3 





City Study: The Dhaka Water and Sewerage Authority 

Dhaka needs a minimum of 1.6billion L of water a day against a theoretical capacity of 1.35billion L a 

day and an actual production of 1.26billion L. Electrical problems mean 40% of the city's 370 wells do 

not work, while 600km of water pipes out of 2,000km need to be replaced. Average water 

consumption is 119l per capita per day, costing USD0.40 per m 3 . In 1991, 59% of the population 

received piped water from 90,000 household connections and 1,200 communal taps. In 2005, 

DWASA served 75% of the city, including 5.5million with piped water (75% with continuous service) 

and 0.5million through public pipes. Dhaka's population is growing by 6% a year, of which 40% end 

up in the slums. The 2.5million people living in slums are not connected to the water system as they 

are not registered as landowners. Since 2000, the government has deployed the army to stop the 

theft of water supplies in the capital. Under the 1998 master plan, USD500million in investments have 

been identified for the period to 2013. The World Bank water treatment loan of USD80million has run 

into difficulties because of currency problems, so bilateral loans are being sought. 

Of the city's population, 20% were connected to sewerage in 1984, rising to 44% by 1991, due to the 

World Bank supporting a secondary sewerage expansion project. By 2002, this had fallen to 30% due 

to population expansion, with 10% of effluents being treated. Dhaka's sewerage system currently 

serves 27% of the population. The World Bank estimates that up to USD8billion will be needed for the 

water supply and sewerage system over the next 20 years. Dhaka's effluent treatment capacity is 

120,000m 3 a day, but only 50,000m 3 reaches the plant because the main sewer pipe is broken. The 

Fourth Dhaka Water Supply and Sanitation Project includes a USD3,159million scheme to improve 

Dhaka's sewerage network by 2020. 

The water table in Dhaka is falling by 3m per annum due to over-abstraction from 444 deep tubewells, 

which supply 88% of the city’s demand. 

Veolia, Grameen and water micro finance 

The 2006 Nobel Peace Prize winner, Muhammad Yunus has formed a joint venture between 

Grameen Bank and Veolia Water to provide water to poor rural communities in Bangladesh. 

Grameen-Veolia Water Ltd is 50% owned by Veolia Water AMI (Africa, Middle East, India) and 50% 

by Grameen Healthcare and aims to bring drinking water to more than 100,000 people for a total 

investment estimated at EUR500,000 (USD790,000). At the end of 2008, the first plant that is 

currently in the planning stage, will supply water suitable for cooking and drinking to 25,000 

inhabitants of Goalmari, a village 100km from Dhaka. 

67 


BANGLADESH 


MAJOR CITIES 


Dacca 12,430,000 16,842,000 N/A 

Chittagong 4,114,000 5,707,000 N/A 

Khulna 1,494,000 2,048,000 N/A 

Sources: 

ADB – APDF (2007) Asian Water Development Outlook 2007: Country Paper – Bangladesh, ADB, 

Manila 

‘Water of strife’, John Vidal, The Guardian, G2, 27/03/2002. 

68 


BELIZE 


BELIZE 

The state held Water and Sewage Authority (WASA) was privatised in 2001. 10% of the shares in 

Belize Water Services Ltd (BWS) WASA’s successor company were acquired by the Belize Social 

Security Board, 7.3% by the public and the remaining 83% was acquired by Cascal. BWS is 

responsible for urban and adjacent areas in Belize, accounting for in excess of 50% of the country's 

population. Belize had a population of 236,000 in 2002, 48% living in urban areas. The Water Law of 

1970 gave WASA the right to manage all water services in Belize. In 1995, WASA handed over its 

involvement in rural areas to the ministry of rural development. BWS remains actively involved in 

these areas in a support capacity. In August 2005, these shares were bought back by the government 

in August 2005 for USD24.9million. These shares were subsequently sold to local and international 

investors for USD25.4million. As part of the original repurchase agreement, Cascal was awarded an 

O&M contract for BWS. 

Three of the nine urban districts have sewerage (Belize City, Belmopan and San Pedro). Water in the 

island of San Pedro is provided through a desalination system provided by Consolidated Water. The 

San Pedro rate is subsidised by the government. In San Pedro, water costs BZD0.20 per gallon for 

the first 1,000 gallons per month. In Belize City the fee is BZD0.10. There is typically a 20% higher 

cost for regions where sewerage services are provided. Outside these areas, the typical rate is 

BZD0.075. 

Distribution losses have been cut from 53% by BWS in 2001 to 38% in 2005 with the long term aim of 

achieving 10-15%. In 2002, water sales by volume grew by 12.5% on the completion of the Belize City 

Water Expansion Project and by an average of 7.5% pa between 2002 and 2005. BWS had 39,400 

customers in 2005. Metering and billing is carried out on a monthly rate nation-wide. Potable water is 

formally provided to 90% of the country, including all urban dwellers. 59% of the urban population had 

access to sanitation in 1994. 

Private Sector contracts awarded (Please see the relevant company entry for details) 


Belize Urban water & sewage services, BOT Cascal 

San Pedro Water provision, 23 year BOT Consolidated Water 


Company Parent company (country) Population served 


Cascal Biwater (UK) 125,000 70,000 125,000 

Consolidated Consolidated Water (USA) 7,000 0 7,000 

69 


BOLIVIA 


BOLIVIA 



USD1,100 


USD2,890 

GDP in agriculture 14% 

GDP in industry 26% 

GDP in services 60% 

Water and sewerage services 

In 1988, 89% of the urban population had access to piped water, with 32% having indoor taps. 70% 

had access to sanitation, including 42% with flush lavatories. Water provision on the city level was 

fairly consistent in 1998, but there were appreciable differences in sanitation and sewerage coverage. 

Piped water Indoors 

La Paz 97% 44% 

Santa Cruz 83% 25% 

Cochabamba 82% 59% 

Oruro 96% 25% 

Sanitation Flush 

La Paz 68% 65% 

Santa Cruz 95% 20% 

Cochabamba 81% 61% 

Oruro 45% 37% 

In December 2002, Bolivia launched a five-year, USD496million drinking water and sanitation project, 

aiming to extend drinking water to some 2.1million people (USD154million) and sewer infrastructure to 

about 2.3million people (USD265million), plus USD77million in capacity building and technical 

assistance. Aguas de Illimani was meant to invest USD30million in the plan. 

Population 

2007 (million) 9.0 

2020 (million) 11.6 




Cochabamba: the beginning of the end 

The Cochabamba concession process was a direct result of political support and multilateral funding. 

President Sanchez, during his rule from 1993-97, promoted PSP. The World Bank provided a 

USD14million loan to Cochabamba which was linked to promoting PSP and in October 1999, the 

Drinking Water and Sanitation Law (Law 2029) was passed enabling PSP to take place. SEMAPA, 

the municipal water utility provided water for four hours a day and had a record of poor and limited 

service. There is no evidence of local companies playing a lead role in water PSP in Bolivia. 

The concession in Bolivia involved a 15-17% guaranteed US dollar rate of return, with exchange risk 

covered by tariffs. This was one of the reasons for the concession’s swift collapse. The Cochabamba 

concession attracted a single proposal, which was then developed through negotiation. Aguas de 

Tunari was awarded the concession in October 1999 with the concession starting in January 2000. 

Law 2029 meant that the concession covered all water resources in its area and all actual and 

potential customers had to connect to the system and well owners were obliged to use the company’s 

water irrespective of their ability to pay. No public consultation was taken either over the law or the 

concession process. Contract disputes were to be dealt with through the International Centre for the 

Settlement of Investment Disputes, the International Chamber of Commerce and the United Nations 

Commission on International Trade Law. 

In April 2000, there was a week of rioting that left one dead and 175 injured after violent protests 

against the PSP. IWL withdrew from the project as a result. In January 2000 Aguas del Tunari 

increased prices by 20% as stipulated by the government. Part of this increase was imposed by the 

government to recoup previous project costs. Since 2000, investment in water infrastructure has been 

70 


BOLIVIA 


frozen, due to the refusal of the protestors to allow charges for water. The Bolivian government 

acquired 80% of Aguas de Tunari from Abengoa (25%) and International Water (Bechtel and Edison, 

55%) for USD0.25 in 2006. This ended the dispute between the parties. 

Urban data (2004) 






La Paz & El Alto: the end of the beginning? 

In January 2006, Bolivia’s newly elected President Morales created a water ministry charged with 

renationalising water operations. Suez’s La Paz and El Alto concession was targeted, as it is the only 

major concession in Bolivia. Abel Mamani, the water minister previously ran Fejuve, the anti private 

sector pressure group operating in La Paz and El Alto. 

Sisab, the Bolivian basic services regulator was meant to produce an audit about AISA’s performance 

in order to justify the concession’s termination. It appears that this audit has been withheld by the 

government, as previous audits have shown that AISA has performed at least to expectations. Indeed, 

Sisab gave Aisa an A+ rating in April 2006 and qualified it as “Bolivia’s best firm”. AISA agreed to 

hand over the concession in October 2006 and it was handed over in January 2007. 

Bolivar battles on, with Spain’s assistance 

The political changes have been reflected in a fall in water finance. Annual investment in water and 

sewerage was USD48-69million between 1996 and 1999 and USD65million in 2000. Between 2001 

and 2006, it has ranged between USD22-50million pa. 

Bolivia’s "Water, belonging to all and for all" declaration of 2007 states that "no one owns water; water 

belongs to the state and its protection, preservation and development is the responsibility of all 

inhabitants". In May 2007, Bolivia withdrew from the World Bank’s International Centre for the 

Settlement of Investment Disputes (ICSID) and the ICSID convention. This is the arbitration 

mechanism for international disputes. The Bolivian government is expecting to sign a potable water 

and irrigation financial cooperation agreement with Spain to ensure that most of the USD1.5billion 

Water Fund for Latin America announced by Spain in 2007 will go to Bolivia. Bolivia intends to invest 

USD621million in 2008 for potable water services, water resources management and irrigation. 

Freshwater 



Annual withdrawal (date) 1.4km 3 

Domestic 22% 

Industrial 20% 

Agriculture 48% 

MAJOR CITIES 

City 2005 2015 Comments 

La Paz 1,533,000 1,817,000 Water and sewerage in limbo 

Santa Cruz 1,352,000 1,932,000 N/A 

Another area of dispute 

In April 2000, Bolivia’s Ductec paid USD46million for the concession to distribute water from the Silala 

River/Springs. The company has been seeking to charge Chilean companies for using the water 

downstream where it flows into Chile. The Chilean companies claim that this water is from Chile and 

refuse to pay the USD4million pa that Ductec seeks. Ductec is threatening to build a dam which would 

divert the water away from Chile unless it is paid. In 2004, Chile’s president Ricardo Lagos said that if 

technical and geological studies prove that the source is in Bolivia and thus not an international water, 

Chile would be willing to negotiate rates. In essence, this is a reverberation of the 1879 War of the 

71 


BOLIVIA 


Pacific, when Bolivia lost its Pacific seaboard to Chile. Water, as ever, is thus used as a tool in 

international diplomacy. 

Private sector contracts awarded (Please see the relevant company entry for details) 


Silala Springs Water rights and provision concession Ductec 




Ductec Ductec (Bolivia) N/A 0 N/A 

Sources: 



Dalton G. (2001) ‘Private sector finance for water sector infrastructure: what does Cochabamba tell us 

about using this instrument?’ Water Issues Study Group, School of Oriental and African Studies 

(SOAS), University of London (Occasional Paper No 37, 2001). 

Harris C (2003) Private Participation in Infrastructure in Developing Countries: Trends, Impacts, and 

Policy Lessons. World Bank Working Paper No. 5. World Bank, Washington DC 

Slattery K (2003) What Went Wrong? Lessons from Cochabamba, Manila, Buenos Aires, and Atlanta. 

Water & Wastewater Annual Privatisation Report, The Reason Foundation. Los Angeles USA 

World Bank & PPIAF (2006) Approaches to Private Participation in Water Services: A Toolkit, 

Appendix A. World Bank, Washington DC 

72 


BRAZIL 


BRAZIL 



USD4,730 


USD8,800 




Regulation and legislation 

In 2000 the Brazilian Government passed a law to establish the Agência Nacional de Águas (ANA), a 

new federal regulatory agency responsible for the implementation of the National Water Resources 

Policy and for co-ordinating the National System of Water Resources Management. The agency will 

have financial and administrative autonomy, and will be linked to the Ministry of the Environment. In 

Brazil, there are 27 state water and sewage companies serving 89million people (72% of the urban 

population) in 3,823 municipalities (69% of the total). 

Each of the 26 states and the Federal District manage water under state jurisdiction. At the river basin 

level, 43 Basin Committees have been established to date, 39 of these at state level and 4 in basins 

of rivers under Federal jurisdiction. Around 50% are found in the south east. The Water Law of 1977 

established the principle of decentralised and participatory management, with a discussion on the 

best management practices with local users. A law on pricing provisions has been adopted in 

14 states and in the Federal District, with the aim of full cost recovery through billing. One of the main 

strategies of the National Sanitation Policy is to improve the level of efficiency of service providers and 

co-ordination of public and private efforts in order to optimise the upgrading and expansion of service 

cost without incurring excessive costs. 

In March 2004, Brazil’s lower house approved a bill aimed at promoting public-private partnerships in 

water and wastewater. If fully enacted, the bill will require projects to have an environmental license 

and guarantees on the part of the private sector in the form of bid and performance bonds. The Sao 

Paulo state government is understood to be planning to create a state controlled company, 

Companhia Paulista de Parcerias, which would manage public-private partnership projects. In 

June 2004, a law (10.881/2004) was passed regulating contracts for river water use between 

companies and municipal water works and the National Water Agency (ANA). Water basin 

committees will receive authority to set up water companies or choose a company to manage the 

water in their area. This will encourage water basin regions to start charging for river water. 

In 2005, Brazil approved a national water resources plan (PNRH) for 2006-16, which is designed to 

secure water supplies to people currently unserved, while safeguarding some of the world’s richest 

aquatic life. The National Water Resources Plans aims to double the number of inhabitants served 

with potable water and sewage systems between 2005 and 2015. The plan details the current water 

resources in the country and projects a scenario with targets for 2020, with guidelines for a greater 

rationalisation of the country’s water supplies. 

Population 

2007 (million) 183.9 

2020 (million) 219.2 



In urban agglomerations, 2050 93.6% 

National Plans 

The national sanitation regulation bill aims to encourage state sanitation utilities and private sector 

players operate in by putting the responsibility of sanitation regulation on states, but also allows for 

the responsibility to be delegated to municipalities, or shared between states and municipalities. 

In 2007, Lei 11.445/07 para o saneamento básico (water and sanitation services law) went into action, 

with the aim of increasing investments to provide universal access to water and sanitation, while 

allowing for flexibility regarding account circumstances and the ability of people to pay for these 

services. A Program for the Acceleration of Growth (PAC) was also launched, for upgrading Brazil’s 

infrastructure. USD205billion will be provided by state owned companies and the private sector and 

USD30billion by the Federal Government. This plan includes raising sewerage connections nationally 

73 


BRAZIL 


from 35% to 75% by 2018. The PAC will invest BRL38.3billion (USD23.5billion) in basic sanitation by 

2010. The water and sewerage department of the cities ministry believe that the sector needs an 

BRL200billion (USD123billion) investment. 

Brazil's government plans to expand potable water services to 87% of the country and to have 

sewerage services reaching 55% of the population by 2010. This will, cost BRL11billion a year. Of 

that total, some BRL1billion will come from the national budget, BRL2billion from the PPI pilot 

investment programme, and at least BRL3billion from the federal workers' unemployment insurance 

fund (FGTS). More than BRL3billion would come from another fund, the FI-FGTS. According to a 

report by the Instituto Trata Brasil released in April 2008, Brazil needs to invest BRL11billion in basic 

water and sanitation services every year for 20 years, while the government plans to invest 

BRL10billion per year, starting in 2008, but only for the next four years. 

Infrastructure development 

The table below outlines the regional development of water, sewerage and sewage treatment in Brazil 

in 1991. The column for treated sewage refers to the percentage of sewage collected that is subject to 

treatment. 

% Water Sewerage Treated 

North 82% 4% 24% 

N East 87% 16% 72% 

S East 93% 57% 32% 

South 96% 18% 33% 

West 87% 35% 40% 

Total 91% 35% 38% 

The National Sanitation Policy seeks to develop universal access to water and sewerage services in 

urban areas, with at least 80% of effluents subject to treatment by the year 2010. In 1995, 15.6% of 

urban sewage effluents were treated. 

Water supply 

1970 1980 1997 

Urban 61% 79% 91% 

Rural 3% 5% 20% 

Sewerage 

1970 1980 1995 

Urban – network 22% 37% 48% 

Urban – septic tanks 25% 23% 23% 

Rural – network 1% 2% 3% 

Rural – septic tanks 3% 7% 11% 

In 1995, 92.8% of water produced and distributed through the domestic supply network was treated. 

Studies in 2000 by the Ministry of Health and BNDS, the state development bank, found that 

18,250 people die each year as a result of inadequate basic sanitation, with 65% of all infant 

admissions to hospital as a result of infections related to solid or liquid waste. 

According to the Ministry of Cities in 2003, Brazil needs to invest around USD62billion in sanitation 

and water supply programs by 2020 to meet urban service needs. 45million Brazilians who live in 

urban and rural areas do not have access to water supplies. More Brazilians had telephone lines, 

refrigerators and television sets in 2002 than access to a proper sewage system, a government study 

showed. 







74 


BRAZIL 


Market structure and the private sector 

Water and sewerage services to urban areas are provided through two contract types. They can 

either be granted through concessions to state sewerage companies for 25 to 50 years or by direct 

management through autonomous departments. In some cases, the latter is provided with assistance 

from the Ministry of Health via the National Health Foundation. 

Water Sewerage 

Total 7,327 1,544 

Concessions 4,753 686 

Direct mgt 2,024 583 

Assisted by MFH 625 185 

There are 27 concession companies (County Water and Sewerage Service companies), all of whom 

serve more than 100,000 people and supply water to 78% of the urban population and sewerage 

services to 64%. Contracting out to the private sector as opposed to commercialisation and the partial 

flotation of municipal concession holders remains at an early stage. In total, there are some 1,350 

water and sewerage entities in Brazil, of which 32 were operated by the private sector in 2005 and by 

2008 there were 40 private companies provide sanitation services to about seven million people in 63 

Brazilian municipalities. This excludes companies which have been partially privatised through share 

issues such as SABESP. 

Problems affecting other entities are not going away and in 2008 state-run water and sewage utilities 

gained BRL600million to assist in financing projects, purchase equipment and improve management. 

At least 11 of the 25 Brazilian state-run waterworks companies are in serious financial distress. 

Brazil’s leading water entities (BRLmillion, 2005) 

Companhia de Saneamento Basico do Estado de São Paulo – Sabesp 4,397.1 

Companhia Estadual de Aguas e Esgotos – Cedae 1,506.3 

Copasa 1,194.4 

Companhia de Saneamento do Parana – Sanepar 1,031.7 

Companhia Rio Grandense de Saneamento – Corsan 753.7 

Empresa Baiana de Aguas e Saneamento – Embasa 573.9 

Companhia de Saneamento de Goias – Saneago 448.7 

Companhia de Saneamento Ambiental do Distrito Federal – Caesb 443.0 

Companhia Pernambucana de Saneamento – Compesa 420.5 

Companhia de Aguas e Esgotos do Ceara – Cagece 335.5 

Source: Valor Economico August 2005, cited in COPASA's February 2006 IPO document 

Freshwater 







Financing service extension 

The estimated cost for investments necessary to develop an urban water supply, sewerage and 

sewage treatment service network is BRL50billion (USD20billion) by 2017. The government estimates 

that Brazil requires overall investments of BRL178billion (USD81.1billion) by 2025. Of this total, 

approximately BRL110billion is needed to provide universal sewage collection and treatment. 

CEF, Brazil’s federal bank announced in 2005 that Brazil needed to spend BRL10billion 

(USD4.4billion) pa to attain broad sewerage and sewage treatment coverage. The difficulty here is 

that Brazil’s monetary council only allows municipal and state entities to raise new loans where they 

are currently unable to finance them. CEF is seeking to encourage specific concessional contracts 

with state water authorities for the funding and management of new wastewater treatment works. In 

order to support this, a BRL3.43billion (USD1.55billion) fund was launched in 2006 by the government 

that will be used to guarantee payments 

75 


BRAZIL 


USbillion Water Sewage Total 

Invested, 1970-98 11.0 6.0 17.0 

Needed, 1999-10 5.6 25.4 31.0 

PPP for smaller scale water and sewerage projects are being encouraged by the government through 

a bill introduced in May 2006 which opens up expressions of interest regarding areas where 50million 

people are currently unserved. Bahia state is currently looking at tenders for a public-private 

partnership covering sewerage services. Sabesp's Alto Tietê water supply PPP has to increase water 

treatment capacity by 50% at one of the main water treatment plants in the São Paulo metropolitan 

region at a cost of BRL270million. 

Groundwater 



Private sector players 

The three main private sector partnerships are at least holding their own in Brazil. In 2005 Copasa 

increased its number of water concessions from 595 and sanitation services from 152 in 2004 to 608 

and 170, respectively. In the same period Sanepar renewed nine municipal contracts and gained one 

additional 30-year concession for water supply and sanitation services in the municipality Bom Jesus 

do Sul, with operations in 343 of the state's 399 cities. Rio de Janeiro’s Nova Cedae anticipates an 

IPO in 2009. 

According to Valor Econômico (BN Americas 3 rd September 2008) the private sector currently 

operates 9.8% of services in Brazil's basic sanitation sector, compared with 6% of services in 2006 

and 7.5% in 2007. The increase in 2008 is for 3.2million people via seven new contracts. The report 

states that the private sector aims to cover 30% of the market in 10 years. 

Company State Population served Water connections 

CEDAE Rio de Janeiro 9,700,000 1,500,000 

CESAN Esprito Santo 1,700,000 353,000 

COMPESE Pernembuco 5,100,000 1,000,000 

EMBASA Bahia 6,800,000 1,600,000 

Municipal 

Campo Grande Mato Grosso do Sul 607,299 146,112 

Cuiaba Mato Grosso 539,692 105,883 

Itu Sao Paulo 34,404 112,000 

Novo Hamburgo Rio Grande do Sul 44,210 192,274 

Vareza Grande Mato Grosso 36,217 192,979 

Waterworks concessionaire Aguas de Niterói has invested BRL148million (USD70.1million) since 

2001 to extend water and sanitation services in Niterói, the second biggest city in Brazil's Rio de 

Janeiro state. Aguas de Niterói won the 30 year Niteroi concession in 1999, and since opening 

operations the company has increased the supply of potable water from 46% in 1999 to 100% today; 

the concessionaire also collects and treats 75% of the city's sewage, up from 20% in 1999 and well 

above the national average. Besides building the wastewater treatment plants, major investments 

have included the installation of infrastructure to expand the potable water supply and sewage 

collection. 

76 


BRAZIL 


Brazil – Local concession projects 

Municipality Concessionaire (operator) Population Comments 

Aracatuba, SP Sanear (Amafi, Multiservice) 157,467 Sewerage 

Birigul, SP Aquaperola (Isratec, Hidroge) 84,016 Bulk water 

Cajamar, SP Aguas de Cajamar (Multiservice) 33,707 Water 

Campos, Rio Aguas de Paraiba (Cowan) 350,000 Water & sewerage 

Itu, SP Cavo Itu (Cavo, Camargo Correa) 112,939 Sewerage 

Jau, SP Aguas de Marigada (Multiservice) 97,354 Water 

Jau, SP Consorcio SR Almeida, Silec 97,354 Sewerage 

Jundiai, SP Cia Saneamento de Jundiai 288,644 Sewerage 

Mairinque, SP Cia Agua (Grupo Villanova) 35,000 Water & sewerage 

Marilia, SP Aguas de Marilia (Hidroge) 173,841 Bulk water 

Mineiros do Tiete, SP Saneciste 9,462 Water & sewerage 

Niteroi, Rio Aguas de Niteroi (Cowan, Carioca) 448,736 Water & sewerage 

Ourinhos, SP Aguas de Esmeralda (Multiservice) 79,148 Bulk water 

Ourinhos, SP Telar Engineering 79,148 Sewerage 

Paranagua Aguas de Paranagua (Castilho) 110,000 Water & sewerage 

Pereias Novacon 4,850 Water & sewerage 

Petropolis, Rio Aguas do Imperador (Cowan) 263,838 Water & sewerage 

Regia dos Lagos I, Rio Aguas de Juturnaiba (Cowan) 200,000 Water & sewerage 

Regia dos Lagos II, Rio Prolagos (ADP, Monteiro Aranha) - Water & sewerage 

Ribeirao Preto, SP Ambient (CH2M Hill, Rek) 450,960 Sewerage 

Salto, SP Saneciste de Salto (Saneciste) 100,000 Sewage treatment 

Tuiuti, SP Ribeirao Pantano Tuiuti (Novacom) 3,000 Water & sewerage 

Source: Adapted from Global Water Report, p11, 204, 08-10-2004 

Earth Tech's Brazilian subsidiary Multiservice gained a 25 year DBO contract for water supply and 

sewerage to Nova Friburgo in Rio de Janeiro. 170,000 people are served, with 10% metered. 

Universal water metering is planned by 2005. Water and sewerage for the resort of Dos Lagos had a 

PPP with a 25 year concession being awarded in 1998. The resort holds 600,000 people in the 

holiday season. Hochtief, Preussag and RWE’s RRE of Germany were originally involved, but 

withdrew from the consortium in April 1999. ProLagos (PEM Enghenaria and Monteiro Aranha 

Participacoes of Brazil) will now hold the concession, with a capex of USD181million. 

77 


BRAZIL 


MAJOR CITIES 


Sao Paulo 18,333,000 20,535,000 SAPESP partially floated 

Rio de Janeiro 11,469,000 12,770,000 CEDAE flotation postponed 

Belo Horizonte 5,304,000 6,354,000 COPASA floated in 2006 

Porto Alegre 3,795,000 4,096,000 N/A 

Recife 3,527,000 3,830,000 N/A 

Brasilia 3,341,000 4,282,000 N/A 

Salvador 3,331,000 3,950,000 EMBASA PSP under way 

Fortazela 3,237,000 3,850,000 N/A 

Curitiba 2,908,000 3,581,000 N/A 

Campinas 2,634,000 3,003,000 N/A 

Belem 2,043,000 2,524,000 N/A 

Grande Vittoria 1,613,000 1,974,000 N/A 

Santos 1,634,000 1,890,000 N/A 

Manaus 1,645,000 2,059,000 Manuas Saneamento sold to Suez in 2000 

Goiânia 1,898,000 2,372,000 N/A 

Natal 1,035,000 1,253,000 N/A 

Grande Sao Luis 990,000 1,192,000 N/A 

Sao Jose de Campos 972,000 1,560,000 N/A 

Catarinense 936,000 1,131,000 N/A 

Maceió 1,116,000 1,391,000 N/A 

Joâo Pessoa 918,000 1,087,000 N/A 

Teresina 872,000 1,029,000 N/A 



Dos Lagos 25 year water and sewerage concession ProLagos 

Nova Friburgo 25 year concession, water and sewerage Multiservice-engenharia 

Jau 25 year DBFO, wastewater Multiservice-engenharia 

Sabesp Sale of 49% of Sao Paulo’s stake 1994-04 Sao Paulo / SABESP 

Sanepar Sale of 30% of Sanepar by Parana Andrade Gutierrez 

Manuas Water & sewerage concession Suez 

Brusque Deep shaft STW BOT Cejen 

Campo Grande Water and sewerage concession Aguas Guariroba 

Minas Gerais Sale of 30% of COPASA in 2006 COPASA 


Company 



SABESP San Paulo municipality 22,600,000 18,300,000 22,600,000 

Aguas de Limeira Suez (France) 256,000 256,000 217,000 

Sanepar Andrade Gutierrez (Brazil) 8,136,000 3,892,000 8,136,000 

COPASA Minas Gerais 11,300,000 5,700,000 11,300,000 

Manuas Saneamento Suez (France) 1,400,000 1,200,000 1,400,000 

Cejen Sacyr Vellehermoso (Brazil) 0 200,000 200,000 

ProLagos Aguas de Portugal (Portugal) 600,000 600,000 600,000 

Multiservice-engenharia Earth Tech/Tyco (USA) 180,000 300,000 300,000 

Aguas Guariroba Bertin-Equipav (Brazil) 730,000 124,000 730,000 

78 


CAMBODIA 


CAMBODIA 

During 1998-99, the Ministry Industry, Mines and Energy awarded four local private sector contracts 

to secondary towns in the country. These contracts were awarded to local operators under unsolicited 

bids and the operators’ identities have not been revealed. While labelled as BOT contracts, they are in 

fact being operated as full concessions with operating lives of 23-40 years. In each case, the number 

of people served refers to the percentage of the town’s population that is actually connected. 

According to Castalia, these contracts have performed to expectations, although no provision has 

been made for access to poorer households. Coverage in Cambodia’s other 19 secondary towns 

ranges from 5-9%. 

Cambodia – Local projects 

Project Operator Population Comments 

Banteay Meanchey N/A 8,000 Commenced 1998, 8% of households connected 

Kompong Speu N/A 8,000 Commenced 1997, 20% of households connected 

Kien Svay N/A 1,000 Commenced 1998, 2% of households connected 

Takeo N/A 2,000 Commenced 1997, 6% of households connected 







A National Water Resources Policy was adopted in 2004, with legislation on Water Resources 

Management being passed in 2007. 2015 targets are for 80% safe water coverage and 74% with safe 

sanitation. USD114million is budgeted for water and sanitation projects from 2007 to 2009. 

Phnom Penh’s: Water Supply Authority has 147,000 connections covering 83% of the city and was 

corporatised in 1996. Between 1996 and 2001 it received USD100million of donor assistance from the 

ADB, the World Bank, JICA, and the French Government. This has resulted in non-revenue water 

falling from 72% in 1993 to 6% by 2005 and water provision rising from 10 to 24 hours per day, along 

with universal metering. 

There are currently no wastewater collection systems in Cambodia. There is a pilot project underway 

for one area of Phnom Penh which is funded by the World Bank (approved in April 2003). However, 

funding for sanitation and hygiene promotion and activities has generally been limited in Cambodia, 

and has not been a priority in budget allocation. Research on the sector shows that, if they can afford 

to, most residents invest in on-site sanitation (i.e. construct pit latrines and septic tanks). In contrast, 

poor families use river banks and canals for excreta disposal. As a result, Cambodia has one of the 

highest infant mortality and morbidity rates in the world caused by water-related contamination. 

Sources 

ADB – APDF (2007) Asian Water Development Outlook 2007: Country Paper – Cambodia, ADB, 

Manila 

Andrews, C. & Yñiguez, C. (eds) 2004. Water in Asian Cities: Utilities’ Performance and Civil Society 

Views. ADB, Manila, Philippines 

Castalia (2004) Sector Note on Water Supply and Sanitation for Infrastructure in East Asia and the 

Pacific Flagship, Review by Castalia for the World Bank, ADB and JIBC. 

Garn, M., Isham, J. and Kähkönen, S. (2000) “Should We Bet On Private or Public Water Utilities In 

Cambodia? Evidence on Incentives and Performance from Seven Provincial Towns” Middlebury 

College Economics Discussion Paper 02-19, Vermont, USA 

79 


CANADA 


CANADA 



USD36,170 


USD34,610 




Regulation 

Canada has 9% of the world's renewable water resources and 20% of the world’s freshwater when its 

glaciers are included, while accounting for 0.5% of the world’s population. 60% of Canada's 

freshwater drain north, while 90% of the Canadian population lives in the South, where pollution and 

escalating demand are increasing pressure on freshwater resources. 

The Federal Water Policy (1987) encourages full-cost pricing of all water use. The territorial or 

municipal governments set water fees for water use in communities. Provincial legislation such as the 

1996 Alberta Water Act promotes water conservation, strengthens licensing and restricts interbasin 

diversion. Other federal legislation includes the Canada Water Act (1970), the International River 

Improvements Act (1955), the Canadian Environmental Assessment Act (1996), the International 

Boundary Waters Treaty Act (1911), the Canadian Environmental Protection Act (1988) and the 

Navigable Waters Protection Act (1993). 

Population 

2007 (million) 32.0 

2020 (million) 36.4 




Sewerage service penetration reached 75% in 1994, with 93% of the effluents collected by the 

sewerage network receiving treatment, compared with 85% in 1991. 

Development of sewage treatment, 1981-1996 

1981 1986 1991 1996 

None N/A N/A N/A N/A 

Primary 25.0% 27.0% 32.0% 33.0% 

Secondary 25.0% 23.0% 25.0% 24.0% 

Tertiary 14.0% 13.0% 18.0% 18.0% 

The target is to provide 100% of the population with potable water and with 100% sanitation coverage. 

In 1998, 90% of the population had access to potable drinking water, with 85% served by sewerage 

and some 80% of collected sewage effluents treated to at least the secondary level. Before usage 

approximately 81.5% of drinking water receives some form of treatment. 

For the municipal sector, providing a complete water supply service plus secondary waste treatment 

in all municipalities is estimated to cost from CAD50 to CAD90billion. This includes the cost of 

upgrading, renovation, expansion, and associated operating costs. The estimated value for the 

municipal water utility systems is about CAD110billion. In May 2001, the Federation of Canadian 

Municipalities estimated that over CAD16.5billion will be needed to upgrade the water infrastructure 

over the next 10 years. CAD5.6billion has been allocated for Federal support between 2000 and 

2005. 

Summary of water and wastewater capital spending surveys 

Source & date Period CADbillion Comments 

Peat Marwick (1994) 1995 – 2015 41 Additional spending 

FCM / McGill (1996) 1997 – 2007 80–90 New & upgraded infrastructure 

NRTEE (1996) N/A 38–39 Maintain extant services 

CWWA (1997) 1997 – 2012 88 New & upgraded infrastructure 

80 


CANADA 


Sources: 

Peat Marwick (1994) “Introduction to Public-Private Partnerships” Proceedings of the 23rd Annual 

Technical Symposium and Exhibition of the Water Environment Association of Ontario, Toronto ON; 

(FCM & McGill): Federation of Canadian Municipalities and McGill University (1996) Report on the 

State of Municipal Infrastructure in Canada. Ottawa ON; 

(NRTEE): National Round Table on the Environment and the Economy (1996) State of the Debate: 

Water and Wastewater Services in Canada. Ottawa ON; 

(CWWA): Canadian Water and Wastewater Association (1997) Municipal Water and Wastewater 

Infrastructure – Estimated Investment Needs 1997-2012. Ottawa ON 

In 2003, it was found that water leakage in Montreal was 37% against the national average of water 

system losses of 13%. According to PriceWaterhouseCooper, updating the system will cost the city 

CAD$4billion over 20 years. 







Water usage 

Between 1991 and 1994, daily municipal water use fell by 3.3% in per-capita terms and fell overall 

despite a 2% increase in the amount of the municipal population receiving water services, over the 

same period. This decrease is a result of declines in commercial and industrial uses; probably 

because of the recession and a reduction in economic activity. 

Municipal water use, by sector (1994) 

Domestic 52% 


Commercial 18% 

Distribution losses 13% 

Total daily residential water use increased slightly and continued to account for more than half of all 

municipal water use in 1994. On a per person basis, daily residential water use fell from 334L per 

person in 1991 to 331L per person in 1994, a decrease of just under 1%. In 1994, Canadian 

households paying for water by volume used 263L per person per day, 39% less water than 

households paying a flat rate, which used 430L per person per day. The percentage of Canada’s 

municipal population with water meters increased from 52.4% to 54.3% between 1991 and 1994. 

Freshwater 

Annual availability (1998) 2,849km 3 



Domestic 11% 



Prospects for the private sector 

While the private sector is typically regarded as having a minimal role in Canada’s water and 

sewerage services, the reality is that of a steadily increasing presence. In the wake of the Walkerton 

tragedy, in which polluted water killed seven people in Ontario in 2000, a number of national and 

regional plans have been carried out. It was evident that the municipality has run down its water 

testing and network maintenance operations to cut costs. In 2004, Ontario’s Liberal government 

indicated that private-sector participation may be considered in the wake of rising capital spending 

needs and some fatal service shortcomings. 

81 


CANADA 


The proposed Safe Drinking Water Act will require mandatory licensing of all water testing 

laboratories and owners of municipal water systems and tighten standards for drinking water 

treatment and distribution. A proposed Sustainable Water and Sewage Systems Act will require 

municipalities to recover the full cost of water and sewer services from consumers. 

Aquatech has been in operation since 1981 and has 50 water and wastewater contracts covering 

0.8million people. The company believes that it controls 60% of the private sector market share in 

Canada. There are three smaller operations in Canada, mainly operating at the O&M level. 

Ontario’s provincial government commissioned an expert panel to write a report in 2005 which 

recommends that the private sector is considered in future policy options. The report recommends 

that counties, single tier municipalities and regional municipalities prepare business plans on how they 

will amalgamate water systems within their boundaries to achieve greater cost efficiencies. In Ontario, 

the number of water or wastewater facilities operated by private firms increased from 26 in 1998 to 42 

in 2001. By 2006, one service provider estimated that between 50 and 75 Ontario systems were 

privately operated. 

Groundwater 



Annual withdrawal (1990) 1km 3 

Domestic 43.3% 

Industrial 14.2% 

Agriculture 42.5% 

MAJOR CITIES 


Toronto 5,312,000 5,938,000 N/A 

Montréal 3,640,000 3,897,000 N/A 

Vancouver 2,188,000 2,389,000 N/A 

Ottawa 1,156,000 1,262,000 N/A 

Edmonton 1,015,000 1,118,000 N/A 

Calgary 1,058,000 1,193,000 N/A 



York Water strategy development US Water 

Moncton 20 year water provision PPP US Filter 

Toronto 15 year wastewater DBO US Filter 

Brockton 5 year water & wastewater O&M US Filter 

Haldimand Wastewater O&M US Filter 

Lake Huron 10 year water O&M Azurix NA 


Company 



US Filter VE (France) 127,000 1,238,000 1,331,000 

Aquatech Aquatech WMS (Canada) 88,000 768,000 800,000 

US Water AWW (USA) 600,000 0 600,000 

Azurix NA AWW (USA) 420,000 0 420,000 

SOURCE: 

A breath of fresh air (2007) Market Solutions for Improving Canada’s Environment, Fraser Institute, 

Canada 

Ontario Government (2005) Watertight: The Case for Change in Ontario’s Water and Wastewater 

Sector, Ontario, Canada 

82 


CHILE 


CHILE 



USD6,980 


USD11,270 




Development of regulation 

Urban water provision and sewerage services have been in continuous development over the past 

150 years. By the end of the 1970s, a large number of public services delivered drinking water or 

collected wastewater in the main cities of Chile, whose urban population then was 8.5million. Services 

were provided by the municipality, along with a number of private companies delivering drinking water 

and providing sewerage services in the upper part of the city. Sewerage was seen as underdeveloped 

and there were no sewage treatment works. As sewerage tariffs were notably low, any 

extension of sewerage coverage was entirely dependent on government funding. In 1977, water and 

sewerage activities were integrated on a regional basis. Two semi-autonomous utilities were created, 

EMOS in the metropolitan region and ESVAL, along with 11 regional services. A regulatory body, 

SENDOS, reporting to the Ministry for Public Works was also established. During the 1980s, EMOS 

started to contract out some maintenance activities. 

The PSP process in Chile has been a relatively gradual one. The regulations enacted in 1988 

outlining full cost recovery for water utilities and setting the state’s responsibilities in overseeing a 

contract meant that the capacity building processes were taking place a decade before the PSP 

process formally began. During the 1990s, Santiago (and the other 11 Chilean water utilities) were 

commercialised with, at the outset, full PSP in mind. While the process was open to local companies, 

the larger contracts, especially Santiago were developed to attract TNCs. 

In Chile, Aguas Andinas is regulated by SISS, which is in turn monitored by the Ministry of Public 

Works. SISS can impose fines for non-compliance. Tariff disputes between AA and SSIS are to be 

resolved through a panel of experts mediating between the propositions. AA has recourse to the 

national courts in legal disputes with SISS. Coverage targets are monitored annually and reviewed 

every five years within the context of a 15 year investment plan. These plans are made available to 

the public. 

While water and sewerage coverage increased, the low level of tariffs did not allow these services to 

grow in terms of maintenance of the new systems and in terms of maintenance, rehabilitation and 

replacement of old systems. As a result, in 1989 a set of laws and regulations were passed and a 

regulatory body, totally separated from operational activities, was created. The reform also included 

laws that allowed the selling of EMOS and ESVAL to the private sector. 

EMOS and ESVAL were transformed into corporatised entities and their shares entrusted to CORFO, 

a government body. The companies follow regulations applied to private companies, although their 

annual budget has to be approved by the Finance Ministry. From 1990 to 1995, their tariffs rose by 

70% so as to eliminate central government subsidies and to enable capital spending to be enhanced. 

During this period, urban water and sewerage coverage reached the highest levels of Latin America. 

The first sewage treatment works were built at the beginning of the 1990s, the first in Santiago being 

built in 1992. 

Since 1995, the government has concentrated on encouraging the PSP of major water and sewerage 

entities through a series of share sales. In 2001, the government has shifted from outright PSP (asset 

sales on the England & Wales WaSC model) to 30 year BOT concessions. MOP, the public work’s 

ministry, will have a new regulator created during 2007, along with a revised concession legislation 

designed to improve the transparency of the process. 

The Chilean Government set 2006 as the target date for all wastewater to be treated governed by 

standards relating to the discharge of industrial wastewater. Decree 90 required 760 industries to 

submit reports by the end 2005 about their discharges. 

15 water utilities raised their water tariffs by more than 3% from November 2005 in line with inflation. 

The increase can result from inflation, variations in the country's tariffs decree, new tax indexes or 

higher costs due to wastewater treatment, among other factors. Every time any of these factors 

83 


CHILE 


accumulates an increase of more than 3%, utilities are entitled to raise their tariffs. In contrast, 

22 water utilities lowered their rates on items such as potable water and sewerage services in 2006. 

For example, Aguas Andinas’s rates will fall by between 2.37% and 3.53% depending on location. 

The rates decrease is based on SISS's examination of the different costs for national and imported 

products and supplies of each utility, which is reviewed every five years. Chile's water rates are 

defined every five years by a decree. 

Population 

2007 (million) 16.1 

2020 (million) 18.6 




Development of services 

Capital spending in 1995 in US dollar terms has only recently picked up. In 1960-65, USD400million 

was spent, falling steadily to USD200million in 1976-80. In 1981-85 it recovered to USD325million, 

easing to USD325million in 1986-90 before reaching USD839million in 1991-95. 

% Water Sewerage Treatment 

1965 53.5 25.4 0.0 

1970 66.5 31.1 0.0 

1975 77.4 43.5 0.0 

1980 91.4 67.4 0.0 

1985 95.2 75.1 0.0 

1990 97.4 81.8 8.0 

1995 98.6 89.2 14.0 

2000 N/A N/A 31.0 

2004 99.7 98.4 72.0 

Chile needs USD2.5billion in capex in the medium term for water treatment and distribution 

(USD1.4billion), wastewater treatment (USD400million) and sewerage (USD700million). EMOS 

forecasts that it will need USD2billion over 20 years so as to ensure the development of its sewerage 

network and its sewage treatment system. Three sewage treatment works are to be constructed in the 

medium term, so as to link in with the city’s sewerage network, as described below. Broadly speaking, 

Chile will need to spend USD5-6billion in order to develop a universal sewerage and sewage 

treatment service in the longer term. 

The government approved a bill in 2004 which will permit the granting of concessions for storm 

sewerage systems. MOP announced in 2006 that USD2.6billion was needed to complete Chile’s 

rainwater management systems for cities with more than 50,000 people, with USD690million required 

in Santiago. 

Aguas Andinas is implementing a USD477million investment plan by 2010 for completing its 

sewerage coverage programme, including USD197million for the construction of the Los Nogales 

wastewater treatment plant, which is scheduled to begin operations in 2010. Nationally, SISS expects 

wastewater treatment to rise from 77.5% in 2005 to 81% in 2006. Longer term targets are 98.8% for 

2010 and 99.4% for year 2015. 







Freshwater 






84 


CHILE 



Groundwater 



Rainwater management is the next area for PSP 

According to a study carried out the Chilean construction chamber's (CChC) specialists, investment in 

sanitation and rainwater management infrastructure during the 2006-10 period will total USD3.7bn, 

while the amount invested during the 2008-12 period should be at least USD4.5bn. The government 

has indicated that PSP will be used as a tool to finance and manage these investments. 

Santiago and Chile’s 12 Regions 

Region Contract People Date of Average water consumption 

Type served (2005) PSP per client 

I BOT 411,586 2003 212.4 M 3 pa 

II BOT 461,333 2003 212.4 M 3 pa 

III BOT 231,357 2004 198.0 M 3 pa 

IV BOT 486,891 2003 180.0 M 3 pa 

V Privatised 1,372,910 1998 180.0 M 3 pa 

Metropolitan Privatised 4,934,120 1999 289.2 M 3 pa 

VI Privatised With VIII 2000 With VIII 

VII BOT 571,047 2001 182.4 M 3 pa 

VIII Privatised 2,075,720 2000 205.2 M 3 pa 

IX BOT 535,317 2003 177.6 M 3 pa 

X Privatised 510,899 1999 190.8 M 3 pa 

XI BOT 69,719 2004 187.2 M 3 pa 

XII BOT 127,615 2003 228.0 M 3 pa 

Region Company 2004 

Concession Company Owners 

Revenues 

USDmillion 

I ESSAT 31.5 Aguas de Altiplano Grupo Solari 

II ESSAN 48.2 Aguas de Antofagasta Grupo Luksic 

III EMSSAT 14.2 Aguas Chañar Hidroscan / Icfal / Vecta 

IV ESSCO 29.2 Aguas de Valle Vicuña / Fernández León 

V ESVAL 100.5 ESVAL Grupo Hurtado 

Metropolitan EMOS 326.9 Aguas Andinas Agbar 

VI ESSEL See VIII ESSBIO Southern Cross 

VII ESSAM 28.7 Aguas Nuevo, Sur, Maule Southern Cross 

VIII ESSBIO 111.1 ESSBIO Southern Cross 

IX ESSAR 25.9 Aguas Araucania Grupo Solari 

X ESSAL 38.1 ESSAL Iberdrola 

XI EMSSA 5.8 Aguas Patagonia Aysen Hidroscan / Icfal / Vecta 

XII ESSMAG 11.6 Aguas Magallanes Grupo Solari 

Source: 

SSIS data, published in Santander Investment (2006) IAM: Swimming in Safe Waters, Santander, 

9 th March 2006, Santiago, Chile 

MAJOR CITIES 


Santiago 5,683,000 6,191,000 EMOS privatised in 1999 




ESSAM RWE (Germany) 571,000 560,000 571,000 

EMOS Aguas Andinas (Chile) 4,934,000 4,900,000 4,934,000 

85 


CHILE 


ESVAL Consorcio Financiero (Chile) 1,372,000 1,280,000 1,372,000 

ESSCO Consorcio Financiero (Chile) 486,000 475,000 500,000 

ESSEL Southern Cross (USA) 600,000 600,000 600,000 

ESSBIO Southern Cross (USA) 1,500,000 1,500,000 1,500,000 

ESSAL Aguas Andinas (Chile) 511,000 475,000 511,000 

ESSAT Aguas Nuevas (Chile) 411,000 390,000 411,000 

ESSAR Aguas Nuevas (Chile) 535,000 520,000 535,000 

ESMAG Aguas Nuevas (Chile) 127,000 125,000 127,000 

ESSAN Antofagasta (Chile / UK) 461,000 455,000 461,000 

Biwater Biwater (UK) 10,000 10,000 10,000 

Bayesa Biwater (UK) 0 300,000 300,000 

Aguas Decima Agbar (Spain) 120,000 90,000 120,000 

Aguas Quinta Agbar (Spain) 200,000 150,000 200,000 

Aguas Cordillera EMOS (Chile) 315,000 295,000 315,000 

Source: 



86 


CHINA 


CHINA 



USD2,010 



Industry 47% 

Services 41% 

Legal Framework 

The State Council is responsible for official government policy and sets national priorities and 

objectives. The State Council’s “Circular on Strengthening Urban Water Supply, Water Saving, and 

Water Pollution Prevention and Control (2000)” set the policy agenda for the 2000–10, by 

(i) improving water supply planning and promoting water conservation; (ii) enforcing the “Law on 

Water Pollution Prevention and Control” by aiming for at least 60% urban wastewater treatment rate 

by 2010; (iii) promoting market-oriented tariff reforms to help attract private capital; and (iv) improving 

sector governance and regulation. It’s “Decision on Reforming the Investment System (2004).” aims to 

promote non-government investment in new areas of the economy, including municipal public utilities 

and encourages enterprises to raise capital through the debt and equity markets, while relaxing the 

government’s review process for new investments. 

The State Council’s document 34, the Circular on accelerating the reform of water price, promoting 

water saving and protecting water resource (2004), defines four major components of water price for 

the first time: water resource tariff, water fee for hydro project, charge for water supply and charge for 

wastewater treatment and emphasises the need to adjust the water supply price to a rational level. 

The 2002 Water Resource Law 

This law has been in effect since 1 st October 2002 and marks a significant tightening of the 1998 

Water Resource Law, introducing a Department of Water Administration run by the State Council as 

an overall manager of water policy for the country. All water abstraction requires permitting and a 

suitable consumption fee. The OECD notes that the Water Law “opens the way for integrated driver 

basin management, stakeholder participation and the use of market mechanisms in water 

management”. 

Formal tariff charging started in 1985. Water provision is subsidised in order to ensure its universal 

availability in urban areas. This applies both to piped water and water provided by vendors. The State 

Council’s document 34, the Circular on accelerating the reform of water price, promoting water saving 

and protecting water resource (2004) emphasises the need to adjust the water supply price to a 

rational level, moving from an average tariff accounting for 0.5% of household expenditure up to 1.5% 

(Browder 2007). 

The Government has passed 13 water laws since 1989, along with a framework water law in 1985 

including: The Water Act (1988), The Management Stipulation of Urban Water Conservation (1989) 

and The Water Consumption Quota Measure (1989). The 11 th five year plan (2006-10) seeks to 

mobilise CNY1 trillion (USD143billion) for water and wastewater projects. Official targets are for water 

coverage in cities to be at least 95% in 2010, up from the current 91%. 

The State Council’s “Decision on Reforming the Investment System (2004)” aims to promote 

non-government investment in new areas of the economy, including municipal public utilities and 

encourages enterprises to raise capital through the debt and equity markets, while relaxing the 

government’s review process for new investments. The 2002 Water Resource Law “opens the way for 

integrated driver basin management, stakeholder participation and the use of market mechanisms in 

water management”. 

A diversion? 

The South to North Water Diversion Project is designed to transfer water from the Yangtze River in 

the water rich south to the water poor north of the country. The disparity between population and 

water resources is such that 80% of water resources are in the Yangtze River Valley, compared with 

54% of China’s population and 35% of arable land. 44% of the population live to the north of the 

valley, but they only have 15% of water resources. The project was first proposed by Mao Zedong in 

1952 and was due to be completed by 2010. Construction in fact started in 2002 and will continue into 

87 


CHINA 


the mid 2030s, at a cost of at least USD60-65billion. More than 2,500km of canals will be built, in 

three separate projects. 

The USD24billion Three Gorges Dam project being constructed along the Yangtze River 

demonstrates the challenges involved in projects of this scale. In 2004, more than 700million tonnes 

of sewage and industrial wastewater was discharged into the Yangtze River basin. The 660-kilometre 

reservoir system started holding water in 2004, and without suitable measures, will trap effluents from 

cities upstream. In 2004, the State Environmental Protection Administration (SEPA) assessed its 

Three Gorges Anti-Water Pollution Plan. To date, 93% of industries have yet to achieve zero 

emissions or emission recycling, against an aim of reducing industrial pollution in the Three Gorges 

Reservoir by 30% by 2005. Indeed, 35% of projects had yet to start and 75% of facilities continue to 

discharge effluents at their pre-plan levels. 320 wastewater treatment works are due to be built by 

2010 at a cost of CNY40billion (USD5billion), but this will only cover 85% of effluents discharged and 

further investment will be needed for sewerage systems. 

Water and sewerage development 

1980 1993 

Piped water (billion m 3 /pa) 8.83 45.02 

Domestic (billion m 3 /pa) 3.39 12.83 

Access to piped water 81.4% 93.1% 

Sewage removal (m t/pa) 16.43 31.68 

Sewer pipes (km/1000) 0.24 0.45 

Tariffs, cost recovery and tariff reform 

Water provision has been subsidised in order to ensure its universal availability in urban areas, with 

formal tariff charging only starting in 1985. Currently, water tariffs account for 0.5% of household 

expenditure and there is no effective constraint upon its consumption. In 2004 the ministry of water 

resources estimated that China's economy is 85% below the global efficiency average in water 

consumption. This is in part due to outdated plant and management techniques, but mainly as a result 

of artificially low water fees. 

Profitability of municipal water utilities 

1997 (531 cities) 2004 (661 cities) 

Profits Average for all Category I Category II Category III 

>10% 10% 0% 7% 4% 

0% - 10% 48% 38% 41% 32% 

0% - -10% 16% 33% 18% 26% 

> -10% 23% 29% 33% 38% 

High capital spending since 1997 and the cost of servicing new debt have eroded the general 

profitability of these services. Indeed, these services are currently making a loss in a majority of cities. 

This is only partly accounted for by factors such as tariffs. It is evident that if bills are not paid, this 

erodes revenues and profits as do excessive management, staffing and operating costs. 

Water tariffs and tariff reform 

Until recently, water tariffs did not reflect their actual costs. This is in the process of altering due to a 

number of drivers that have emerged in recent years. All domestic urban water users are metered, 

either directly through household or apartment connections or through a meter serving their entire 

apartment block. The table below summarises water tariffs by city category, tariff changes over the 

past decade. 

Weighted average water supply tariffs by category of city (CNY/m 3 ) 

City 1997 2004 Change 

Category I 1.00 1.72 72% 

Category II 0.93 1.33 43% 

Category III 0.85 1.24 46% 

National average 0.93 1.37 47% 

88 


CHINA 


According to the National Development and Reform Commission, average tariffs in the 36 large and 

medium sized cities rose by 10% during 2005 to CNY2.09 per m 3 including CNY1.55 per m 3 for water 

and CNY0.54 per M 3 for wastewater. 

The water industry generates revenues of CNY60-70billion pa, which is anticipated to rise to 

CNY150-200billion by 2010 as tariff reform drives tariffs to CNY6.00 per m 3 . 

Tariffs in 2005 

CNY per M 3 Conventional water Reclaimed water 

Domestic Industrial Domestic Industrial 

Beijing 3.7 5.6 1.0 1.0 

Tianjin (central) 2.9 4.6 1.1 1.3 

Population 

Total 2007 (million) 1,296.2 

Total 2020 (million) 1,423.9 




Urban water in China 

The table below highlights the effect of increased tariffs on domestic water usage, whereby despite an 

increase in domestic users from 273million in 2002 to 322million in 2006, the volume of domestic 

water supplied increased from 15.0billion m 3 to 15.9billion m 3 . 

Urban water usage in China, 2002-06 

Billion m 3 pa 2002 2003 2004 2005 2006 

Industry 20.9 20.9 21.1 21.0 22.2 

Public services 6.2 6.8 6.8 7.1 6.4 

Domestic supply 15.0 16.4 16.5 17.3 15.9 

Total 46.6 48.4 48.9 50.1 54.1 

Consumption (l/day) 213 215 212 204 190 

Users (million) 273 295 303 327 322 







Water quality and quantity 

In 2004 the Ministry of Water Resources estimated that China's economy is 85% below the global 

efficiency average in water consumption. This is in part due to outdated plant and management 

techniques, but mainly as a result of artificially low water fees. The Ministry of Construction and the 

Beijing municipality, acting under the authority of the State Council, have issued rules aimed at 

rationalising water tariffs to encourage efficiency. 

Currently, over 400 out of the leading 600 Chinese cities are short of water, with Beijing and Tianjin, 

the national capital and a major port city in the north, at a critical moment of water shortage. 

Meanwhile, rural people in some arid areas also have to endure acute water shortage, either for 

farming or drinking. 

China discharged 43-50billion m 3 of wastewater in 2000-2001 (various estimates), including 20billion 

m 3 of industrial wastewater. The annual increase in effluent discharge estimated at 2.4million m 3 pa in 

1999. 63% of rivers tested in 1998 were at or below class four (bad to very bad, equivalent to abiotic) 

on China's five-tiered water-quality scale. Of urban water sources, 90% are also polluted. In 1997, 

China spent 1% of its national budget on environmental protection. Water shortages in cities cause a 

89 


CHINA 


loss of an estimated USD11.2billion (CNY120billion) in industrial output, while the impact of water 

pollution on human health has been valued at USD3.9billion (CNY41.73billion). 

At the end of 2000 (9 th Five Year Plan) there were 427 Waste Water Treatment Works ("WWTWs") in 

China, including 282 to secondary standard, with a total treatment capacity of 14.75million m 3 per day. 

USD3.6billion was spent on building 317 municipal Wastewater Treatment Works in 1998-2002, via 

internal treasury bonds. At the end of 2002, there were 452 WWTWs in operation, with a capacity of 

31million m 3 per day. China recycled 40% of its urban wastewater, compared with 75-80% in 

developed economies. Treatment capacity is to exceed 30million m 3 per day by the end of the 10 th 

Five Year Plan in 2005. In addition, USD2.6billion will be spent cleaning up Beijing’s water system. 

Since 2001, all 699 cities and urban areas with a population of more than 500,000 are meant to 

develop appropriate sewage treatment facilities for 60% of effluents by the end of the 10 th Five Year 

Plan (2001-2005). All cities are meant to charge a sewage treatment levy by the end of 2003. 

Shanghai, Jiangsu and Zhejiang and the other main industrialised cities will have 50% of facilities at a 

cost of USD9billion, treating 22million m 3 of effluent per day. In June 2003, the State Environmental 

Protection Administration (SEPA) announced that China's treatment capacity will double from 

25million m 3 pa to 58million m 3 pa by 2005, with an investment of USD14.5billion. In total, 

USD36billion is to be spent between 2000 and 2010 on WWTWs. In 2001-2005 (10 th Five Year Plan), 

375 WWTWs are to be built. 

In rural areas, 500million people have access to tap water, with 106million having improved sanitation 

facilities. The country's rural areas have seen 674,000 waterworks built along with 48.91million wells. 

By the end of 2000, 880million Chinese rural residents, or 92.4% of the country's rural population, had 

improved water services, with 106million rural dwellers having modern toilets, taking the incidence of 

such toilets in rural areas to 44.8%. However, WHO estimates for 2000 point to 66% and 27% 

coverage respectively. 

Municipal water services in China 

China’s municipal water services (the services provided in urban areas) can be characterised as 

having a notably high connection density (people served per km of water mains), a high metering 

penetration, but a low proportion of water used being provided by the utilities (46% against 68-80% in 

Brazil, Russia and the UK) and a poor payment collection rate. [WB, 2007, p12] 

Service development and city size 

Category Number Population 

million) 

I 

II 

III 

Population > 2million 

GNP/Cap >USD3,000 

Population 0.5-2.0million 

GNP/Cap USD1,500-3,000 

Population < 0.5million 

GNP/Cap

CHINA 


Estimates of Chinese urban sewerage treatment capacity and technology/equipment market: 

1996- 

2000 

2001- 

2005 

2006- 

2010 

2011- 

2015 

Treatment rate (%) 10.8 22 35 50 

Treatment capacity (M tons/day) 10.4 22.2 38.7 60.3 

Current capacity (M tons/day) N/A 10.4 22.2 38.7 

Construction required (M tons/day) N/A 11.8 16.5 21.6 

Investment for construction (billion Rmb) 9.0 14.1-17.6 19.8-24.7 25.8-32.3 

Yearly operation cost (billion Rmb) 1.6-2.5 3.3-5.3 5.8-9.9 9.0-14.5 

Technology / equipment market size (billion Rmb) N/A 4.9-7.9 6.9-11.1 9.1-14.6 

Source: China Environmental Protection Industry Association 2001. 

Total forecast spending on environmental protection: 

9 th five year plan, 1996 2000 USD43billion 



12 th five year plan, 2011 2015 In preparation 

It is understood that the 12 th five year plan will seek to increase urban sewage treatment to at least 

60% and preferably to 70-80%. It will also need to address water scarcity issues in tandem with 

further urbanisation and industrial development. 

China has earmarked USD33billion of the five year plan’s spending on water and wastewater 

treatment projects between 2001 and 2005. Under the 10 th five year plan, 11% of funding is 

earmarked from central government, 34% from local and provincial government and 55% from 

industry. But by the end of 2002, just 28% of the plan had been realised and current expectations are 

for 70% of planned total to be realised by the end of 2005. 

It is understood that the 2006-11 period seeks to mobilise CNY1trillion (USD125billion) for water and 

wastewater projects. This includes CNY330billion on sewage treatment projects for the 278 cities that 

currently do not have them and CNY320billion for the two main pipelines for the South-North Water 

Transfer Project. Official targets are for water coverage in cities to be at least 95% in 2010, up from 

the current 91% and around 70% of wastewater, 28billion m 3 pa will be treated. 

Planning and paying for water and wastewater infrastructure 

Because water provision is officially regarded as a commercial activity, it is not accounted for on the 

11 th Five-Year Plan [WB, 2007, p34], but as the World Bank points out, where the private sector is not 

involved and tariffs do not cover costs, significant state and municipal funds will still be required. In 

contrast, detailed forecasts for investments in wastewater services have been prepared. 

Wastewater investments in the 11 th Five-Year Plan 

Area CNYBillion % 

Water reuse 9 3% 

Rehabilitation 11 4% 

Sludge 43 14% 

Wastewater treatment plants 49 16% 

Sewerage network 188 63% 

World Bank estimates of water and wastewater spending in China: 

CNYbillion 8 th – 10 th Five Year Plans 11 th Five-Year Plan 

1991-05 2006-10 

Water Supply 200 160 

Wastewater 230 270 

Total 400 430 

This represents a more then tripling of the rate of expenditure seen in the previous fifteen years. 

Further significant spending can be expected in the future as urbanisation continues, along with the 

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impact of continued economic development and the broader adoption of water intensive domestic 

goods. 

Global Water Intelligence estimates that operating spending on municipal water services will rise from 

USD4.65billion in 2007 to USD10.88billion by 2016, with operating spending on municipal wastewater 

services rising from USD4.20billion to USD5.95billion during that period. 

PSP and politics 

Private sector participation in water and wastewater services in China has been enabled by legislation 

such as the 1984 PRC Water Pollution Prevention Law and the 1988 PRC Water Law and 

subsequently by various laws governing such aspects as Contract Law (1999). 

The Ministry of Construction ("MOC's") 2000 “Circular on Accelerating the Marketisation of Urban 

Utilities” encourages domestic and foreign investment in urban public utilities through a variety of 

ownership arrangements such as sole ownership, joint ventures, or partnerships. The joint “Circular 

on Accelerating the Commercialisation of Urban Wastewater and Solid Waste Treatment” by the 

MOC, the National Development Reform Commission and the State Environmental Protection Agency 

in September 2002 provided specific references to wastewater treatment plants and promotes 

arrangements such as build-operate transfer (BOT), joint ventures with municipal utilities, and 

transfer-own transfer (TOT) contracts. 

The Chinese Government formally opened the national urban utility market to domestic and overseas 

investors in 2003. Domestic and foreign investors would be allowed to invest alone or cooperate with 

local authorities or enterprises. The ministry would further promote charges for sewage and refuse 

treatment in 2003, and deepen the price reform of water supply, so as to establish a price system 

adapted to the market economy. 

The Ministry of Construction’s 2004 “the Administrative Method of Urban Utilities Concessions” was 

meant to fully establish the legal status of concession contracts, but may need to be further developed 

regarding the legal status of contracts, the imbalance between the enterprise and the government and 

limitation of its applicability. 

Water provision is subsidised in order to ensure its universal availability in urban areas. This applies 

both to piped water and water provided by vendors. The supply of water has deteriorated both in 

terms of availability and the quality of the water provided because of the lack of funding. On average, 

water accounts for 0.5% of household expenditure. In consequence, domestic water use in urban 

China is at an appreciably higher level than is currently sustainable. There have been a number of 

developments at the municipal level designed to eliminate subsidies, while ensuring that water 

services are both of a higher quality and affordable (up to 1.5% of average household expenditure). 

The State Development Planning Commission (SDPC) has announced that urban residents and 

enterprises will pay higher prices for excess water consumption by the end of 2005, and sewage 

processing fees will be charged throughout the country by the end of 2003, on the basis of cost 

recovery. 

At the end of 1999, Chinese and expatriate companies served 11million people against 15million 

being served by international players. More recently, water and sewerage PSP has moved forward at 

a dramatic rate. Since 2000, contracts serving a further 21million people have been awarded to 

international companies, while contracts serving 36million people have been awarded to Chinese and 

expatriate companies. 

International companies seeking to enter this market need official support from at least one of the 

main Beijing government bodies. The State Planning Commission (SPC) approves BOT projects. The 

Ministry of Construction (MOC) approves STW construction and operation projects inside cities, 

having been involved with the private sector since 1993 with the water and sewerage sectors. The 

Ministry of Water Resources (MWR) is responsible for non-urban areas. While the MWR is still 

responsible for major infrastructure projects, it is much less powerful than the MOC, and therefore the 

MWR is not seen as important when seeking international BOT proposals. The State Environmental 

Protection Administration (SEPA, formed in 1998) looks after STWs and industrial effluent treatment 

projects. The NEPA works with provincial EPAs, which are essential partners for sewerage and 

sewage treatment BOT projects. To date, all such projects have in fact remained in state hands, whilst 

mobilising finance from international multilateral agencies. 

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Groundwater 

Total recharge (1998, km 3 ) 870.00 

Per capita (1998, m 3 ) 693 

Withdrawals (1985, km 3 ) 75.0 

For agriculture (1985) 54% 

Chinese private sector players 

Three broad approaches are being used by the private sector in China. Firstly, international 

companies working with joint ventures or through specialist funds. Joint ventures are Sino-French 

Holdings (Suez and New World), and the leading dedicated fund is the China Water Company, which 

is held by RWE (49%), Temasek Holdings (Singapore Government) and Hong Kong Land (Jardine) or 

the setting up of Chinese owned private sector companies. Restrictions on returns by foreign owned 

and controlled entities have meant that stakes in ventures such as Thames Water’s Shanghai water 

treatment project have been sold back. 

Secondly, a major expatriate Chinese market has developed. To date this has mainly come from 

‘expatriates’ in Hong Kong and from Malaysia and Singapore. The development of this market outside 

Hong Kong has taken place since 2000. 

The largest market in terms of recent developments is that of nationally based Chinese companies. 

These can either work on their own or in partnership with international companies. To date six 

examples of the third approach have been identified. One, Shenzen Overseas Chinese Town Co is 

indirectly concerned with the sector, concentrating on the development of tourist facilities for Shenzen, 

including water services. The Suzhou New District Hi-Tech Industrial Co Ltd carried out the 

development and operation of water, road, gas and power services for the city’s Hi-Tech Industrial 

Development Zone. Shenyang Public Utility is responsible for most of Shenyang’s water provision. 

Three others (Shanghai Lingqiao Tap Water Co, Shanghai Municipal Raw Water and Wuhan 

Sanzheng Industry Co Ltd) are primarily concerned with water provision projects and services. In all 

cases, a majority of the company’s shares continue to be directly or indirectly in state or municipal 

hands. 

By the end of July 2004, contracts covering 31million people have been awarded to Chinese 

companies, along with 16million through expatriate Chinese companies. International companies 

serve 36million, in all cases through joint ventures. However, at the end of 1999, Chinese and 

expatriate companies served 11million against 15million being served by international players. Thus 

while Chinese and expatriate companies have privatised services affecting 36million more people 

since 2000, international players have moved more modestly ahead with 21million people. 


Water treatment facilities constructed by Degremont (Suez) and Purac (AWG) in China serve 

100million and 40million people respectively. These companies have been active in the market since 

the 1970s and effectively pioneered the return of western engineering concerns to the country. 

MAJOR CITIES 

Population 2005 2015 Status 

Anshan 1,611,000 1,864,000 PSP (Dalian Dongda) 

Anshun 822,000 922,000 N/A 

Baotou 1,920,000 2,473,000 PSP (Epure) 

Beijing 10,717,000 12,850,000 Various projects 

Benxi 1,000,000 1,144,000 N/A 

Changchun 3,046,000 3,765,000 Wastewater BOT 

Chengde 1,429,000 1,700,000 N/A 

Changsha 2,451,000 3,169,000 Wastewater TOT 

Chengdu 4,065,000 4,637,000 VE has a water treatment & provision BOT 

Changzhou 1,249,000 1,623,000 Water management JV 

Chifeng 1,238,000 1,490,000 N/A 

Chongqing 6,363,000 7,258,000 Bulk water and wastewater BOT 

Dailan 3,073,000 3,664,000 Water treatment BOT 

Daqing 1,594,000 2,067,000 Water treatment BOT 

Datong 1,763,000 2,285,000 N/A 

Dongguan 4,320,000 5,370,000 Bulk water concession 

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MAJOR CITIES 


Fushun 1,456,000 1,653,000 N/A 

Fuxin 807,000 866,000 N/A 

Fuyu 1,068,000 1,244,000 N/A 

Fuzhou 2,453,000 3,172,000 PSP (Cascal) 

Guangzhou 8,425,000 10,420,000 Various water and WW contracts 

Guiyang 3,447,000 4,446,000 N/A 

Handan 1,535,000 1,992,000 Wastewater BOT 

Hangzhou 2,831,000 3,656,000 Wastewater BOT 

Harbin 3,695,000 4,392,000 Water treatment BOT 

Hefei 1,916,000 2,481,000 Two PSP projects 

Henyang 973,000 1,211,000 N/A 

Heze 1,318,000 1,519,000 N/A 

Huaian 1,243,000 1,441,000 Beijing Capital 

Huaianan 1,420,000 1,664,000 One water treatment JV 

Huhehaote 998,000 1,057,000 Water management project 

Hunjiang 798,000 925,000 N/A 

Huzhou 1,203,000 1,417,000 Two PSP projects 

Jiamusi 969,000 1,230,000 N/A 

Jiaxing 954,000 1,160,000 N/A 

Jilin 2,255,000 2,918,000 N/A 

Jingmen 1,228,000 1,403,000 Two water and one WWTW BOT 

Jinan 2,743,000 3,184,000 Seven water BOTs 

Jining 1,143,000 1,397,000 N/A 

Jinzhou 925,000 1,118,000 N/A 

Jinxi 2,268,000 2,988,000 N/A 

Jixi 947,000 1,106,000 N/A 

Kaifeng 848,000 1,015,000 N/A 

Kunming 2,837,000 3,406,000 Water treatment BOT 

Lanzhou 2,788,000 1,938,000 Veolia Environnement 

Leshan 1,411,000 3,117,000 N/A 

Linqing 1,009,000 1,288,000 N/A 

Linyi 2,035,000 2,387,000 Partnership agreement for water supply 

Liuan 1,647,000 1,948,000 N/A 

Liupanshui 1,149,000 1,149,000 N/A 

Liuzhou 1,409,000 1,829,000 Two wastewater treatment plants 

Louyang 1,664,000 2,031,000 N/A 

Mianyang 1,322,000 1,689,000 N/A 

Mudanjiang 1,171,000 1,522,000 N/A 

Nanchang 2,188,000 2,913,000 Wastewater BOT 

Nanchong 2,046,000 2,649,000 One bulk water BOT 

Nanjing 3,621,000 4,151,000 Industrial water BOT, wastewater BOT 

Nanning 2,040,000 2,641,000 N/A 

Neijiang 1,441,000 1,670,000 N/A 

Ningbo 1,810,000 2,345,000 N/A 

Pingxiang 905,000 1,178,000 N/A 

Qingdao 2,817,000 3,248,000 Water & wastewater BOTs 

Qiqihar 1,607,000 1,877,000 N/A 

Shanghai 14,503,000 17,225,000 A wide range of contracts & companies 

Shantou 1,495,000 1,980,000 N/A 

Shenyang 4,720,000 5,377,000 Shenyang Public Utility floated in 1999 

Shenzhen 7,233,000 8,958,000 Bulk water PSP 

Shijiazhuang 2,275,000 2,943,000 UNDP commercialisation project under way 

Suining 1,401,000 1,621,000 N/A 

Suqian 1,258,000 1,422,000 One WWTW BOT 

Suzhou 1,849,000 2,396,000 PSP for industrial development zone 

Taian 1,598,000 1,858,000 N/A 

Taichung 1,033,000 1,281,000 N/A 

Taiyuan 2,794,000 2,863,000 N/A 

Tangshan 1,825,000 2,176,000 N/A 

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MAJOR CITIES 


Tianjin 7,040,000 8,119,000 Various major projects 

Tianmen 1,676,000 1,946,000 Water BOT 

Tianshui 1,199,000 1,946,000 N/A 

Tongliao 855,000 1,036,000 N/A 

Wanxian 1,963,000 2,438,000 N/A 

Weifang 1,498,000 1,822,000 WWTW BOT 

Wenzhou 2,212,000 2,862,000 Water treatment BOT 

Wuhan 7,093,000 8,204,000 Wuhan Sanzheng Industry Holding 

Urumqi 1,562,000 1,905,000 Various projects 

Wuxi 1,646,000 2,135,000 Two WWTW BOTs 

Xian 3,926,000 4,559,000 Water treatment BOT 

Xiangxiang 863,000 1,081,000 N/A 

Xiantao 1,528,000 1,772,000 N/A 

Xianyang 1,072,000 1,355,000 WTW BOT 

Xiaoshan 1,130,000 1,164,000 N/A 

Xinghua 1,587,000 1,677,000 N/A 

Xintai 1,334,000 1,378,000 One WWTW BOT 

Xinyu 870,000 1,096,000 N/A 

Xuanzhou 851,000 987,000 N/A 

Xuzhou 1,960,000 2,566,000 Four BOTs 

Yangchen 789,000 1,029,000 Two BOTs 

Yantai 1,991,000 2,578,000 N/A 

Yichun (H’ang) 785,000 849,000 N/A 

Yichun (Jiangxi) 961,000 1,127,000 Water treatment and WWTW BOTs 

Yixing 1,129,000 1,195,000 N/A 

Yiyang 1,313,000 1,572,000 PSP currently under consideration 

Yonzhou 991,000 1,128,000 N/A 

Yueyang 847,000 880,000 N/A 

Yulin 1,060,000 1,379,000 N/A 

Yuyao 876,000 950,000 N/A 

Yuzhou 1,226,000 1,357,000 PSP WWTW project being tendered for 

Zaoyang 1,210,000 1,418,000 N/A 

Zaozhuang 2,096,000 2,458,000 N/A 

Zhangilakou 1,001,000 1,248,000 N/A 

Zhangjiangang 936,000 1,056,000 N/A 

Zhanjiang 1,514,000 1,905,000 One water BOT 

Zhaodong 783,000 948,000 N/A 

Zhengzhou 2,590,000 2,989,000 Bulk water BOT 

Zibo 2,982,000 3,517,000 China Everbright JV 

Zigong 1,087,000 1,260,000 One WWTW BOT 

The 109 cities forecast in 2003 to have a population in excess of 1million by 2015 is a significant 

increase on the number in the 1996 UN urbanisation assessment. This in turn rose to 114 in the 2007 

assessment. This is due to better data as well as major cities such as Shenyang fragmenting into 

several autonomous entities. It is also of interest to note that there has been some scaling back of the 

2015 population forecasts since the 2001 edition of the Pinsent Masons Water Year Book. 

City Study: Shanghai 

The Shanghai Water Resources Bureau operates the city’s water and sewerage services. All of the 

urban area’s 7,496,500 people are supplied with piped water via 1,499,300 connections, using an 

average of 193L of water per day. All connections are metered, with the quality of water generally 

being regarded as low although water treatment works nominally account for 104% of water demand. 

There is no surcharge for sewerage services. Water costs USD0.13 per m 3 , with no price adjustment 

made for the volume used. Shanghai’s main challenges are developing its infrastructure for continued 

growth, industrialisation and water pollution. 

Greater Shanghai saw the construction of 31 WWTWs between 1980 and 2002 at a cost of 

CNY10billion, treating 44% of the 5.40million m³ of effluents generated each day. There are plans for 

27 more, including 14 between 2001 and 2006, with two major works in construction. The Zhuyuan 

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Wastewater Treatment Plant, 1.70million m 3 per day is being constructed and operated (20 years) by 

Youlian Enterprise Development Company and two other private players. CNY0.87billion is to be 

invested in the project, which started in 2002. The contract is for the operation of the Shanghai 

Zhuyuan No 1 Sewage Treatment Factory. YEDC, along with two other private companies, will invest 

CNY870million (EUR107million), raising its capacity to 1.7million tonnes per day during the contract 

period. The Bailonggang Wastewater Treatment Plant will handle 1.2million m 3 per day at a cost of 

CNY060billion. Both were expected to be in service by the end of 2003. 

In 1995, a consortium led by Thames Water and Bovis (P&O) was awarded a 20 year. BOT contract 

to build and manage a water treatment plant at Da Chang, generating 0.4million m 3 of potable water 

per day. In 2002, the State Council issued a note requiring all fixed return water contracts held by 

foreign entities to be restructured. Thames Water subsequently sold its stake in the venture back to 

the municipality. 

A second water treatment plant is currently being upgraded by Degrémont, on a stand-alone basis. In 

addition, Shanghai has two semi-private water companies. The Shanghai Lingqiao Tap Water Co. 

distributes water to the Pudong district of the city of Shanghai. The Shanghai Municipal Raw Water 

Co Ltd abstracts water from the Yangtze and Huangpu rivers for treatment at the Shanghai 

municipality’s water treatment stations. The company builds and operates the pumping stations, 

canals and reservoirs necessary for the bulk water provision to the city. Shanghai also aims to 

become an 'oriental water metropolis' with the municipal government promising a USD50million 

investment by 2008. This year, the city plans to build water rings linking the Dianpuhe River to 

Suzhouhe River and Huangpujiang River via Xinjing Port and West River, developing them as new 

scenic spots combining sightseeing, tourism and shopping, according to the director. 

Shanghai – Guaranteed returns are not guaranteed 

In 1995, a consortium led by Thames Water and Bovis (both of the UK) were awarded a 20 year Build 

Operate & Transfer contract to build and manage a water treatment plant at Da Chang in Shanghai, 

generating 0.4million m 3 of potable water per day. The facility provides drinking water for 2million 

people, having entered service at the end of 1997. The USD70million construction project was 

operated on a 50:50 basis and called Bovis Thames (Shanghai). In early 2002, Thames Water bought 

out its joint venture partner. 

In 2002, the State Council passed a law requiring all fixed return water contracts held by foreign 

entities to be restructured. In the case of Bovis Thames (Shanghai), the contract was based around a 

12% guaranteed return. Guaranteed returns are still allowed for Chinese companies. Thames Water 

subsequently sold its stake in the venture back to the municipality. It is understood that Thames Water 

made a nominal profit on the share sale. 

City Study: Beijing (Peking) 

The Beijing Municipal Water Works Co. and the Beijing Water Resources Bureau operate water and 

sewerage services. The city’s population of 5,769,600 has 1,153,920 connections, with 95% of the 

population receiving piped water. The average water consumption is 149L per capita per day. Water 

quality is regarded as poor, partly because of the contamination of the groundwater resources that 

supply 69% of current needs. In 1991, water prices were increased from CNY0.25 per m³ to 

CNY0.45 per m³ for industrial and commercial customers and from CNY0.12/m³ to CNY0.30/m³ for 

domestic customers. There are a total of 194,000 water meters, 175,000 for domestic customers and 

14,000 for industrial and commercial customers. Distribution losses are officially estimated at 7.5% 

although in reality they are approximately 28%. 

Year 1993 1996 2000 

Capacity (million m³ per day) 1.90 2.30 3.00 

Demand (million m³ per day) 1.95 2.50 3.10 

In Beijing, 60% of the city was served by sewers in 1993, with the other 40% served by night soil 

carriers. In 1991, 3.6% of the city’s sewage was treated, which increased to 18.5% in 1992. Officially, 

six WWTWs currently handle 50% of the city’s effluents. Two WWTWs handle 1.6million m 3 per day; 

85% of the total treated. In September 2003, bids were invited for five new local WWTWs with a 

combined capacity of 0.16million m 3 per day. One further WWTW was built, with the aim of 87% of 

effluents being treated by the start of the 2008 Olympiad, or 2.62million m 3 per day. The Beijing 

Gaobeidian Sewage Treatment Plant will be the largest in China. 

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In the Greater Beijing area, the total abstraction was 3,564million m³ pa in 1992, and is forecast to rise 

to 5,140million m³ by 2020. Groundwater is heavily used for agriculture (1,447million m³ pa) and it is 

estimated that groundwater over-abstraction is currently running at 2,000–2,700million m³ pa. 

Because water is scarce across Northern China, there is little scope for increasing the use of the 

Miyun and Guanting rivers, which flow in the region. The total water availability is currently at 400m³ 

per capita pa. Water demand was expected to outstrip supply by 70% during 1991-2000. As a 

consequence, in November 1992, fees for water supply were fixed to usage, along with quotas for 

water usage. The current emphasis is to boost water supplies via upgrading and expanding the 

Number 9 Water Treatment Plant. The municipality is playing off various sources of funding for this 

project. In addition, World Bank funding is being sought for upgrading the Gao Bei Dian Treatment 

facility. The Beijing No 10 treatment plant, awarded to AWG, is to cost USD300million, covering 15% 

of the city by the time it enters service. 

In June 2001 a CNY22billion (USD2.6billion) plan was started to ease water shortages in the capital 

city within five years. It involves 20 projects for water resource development, pollution protection, rain 

and flood water utilisation, building of water-saving and ecological agricultural developments around 

the reservoir areas and water quality monitoring. In total, Beijing anticipates spending USD12billion in 

the run up to the 2008 Olympics to improve its environmental performance. This includes an increase 

in sewage treatment from 45% in 2000 to 90% by 2007, with treatment capacity rising from 1.26million 

tonnes per day to 2.62million tonnes per day through USD870million being spent on seven large 

plants, and USD750million on 15 smaller facilities. Prior to the construction of four facilities in the past 

few years, there was effectively no sewage treatment in the city. 

PSP contracts noted 

The list below is not comprehensive. As the edition went to press, 331 contracts had been noted in 

China, plus one each in Hong Kong and Macao. 



Changtu 30 year O&M, water provision Sino French Holdings 

Wanzhou 30 year O&M, water provision Sino French Holdings 

Zhongstan 22 year O&M, water provision Sino French Holdings 

Zhengzhou 30 year O&M, water provision Sino French Holdings 

Baoding 20 year O&M, water provision Sino French Holdings 

Lianjing 30 year O&M, water provision Sino French Holdings 

Chongqing 30 year build & manage, water provision Sino French Holdings 

Tianjin 35 year concession, water provision Sino French Holdings 

Tanzhou 30 year O&M, water provision Sino French Holdings 

Guangzhou 30 year O&M, water provision Sino French Holdings 

Gaozhou 30 year O&M, water provision Sino French Holdings 

Sanya 30 year O&M, water provision Sino French Holdings 

Nanchang 28 year O&M, water provision Sino French Holdings 

Shanghai Pudong, industrial water JV Sino French Holdings 

Sanya 35 year concession, water provision Sino French Holdings 

Qingdao 25 year BOT, water provision Sino French Holdings 

Chongqing 25 year BOT, wastewater treatment Sino French Holdings 

Shenyang 30 year O&M, water provision Shenyang Public Utility 

11 cities 25 year BOT, sewage treatment Sound Group 

4 cities 25 year BOT, water treatment China Water Company 

Hexian 20 year j.v. operation AWI 

Changli 30 year water and sewerage contract Earth Tech 

Guangzhou 20 year DBFO, sewage treatment Earth Tech 

Shanghai 50 year O&M, water services VE 

Chengdu 18 year BOT, water provision VE 

Tianjin 20 year ‘concession’, water provision VE/Marubeni 

Zunyi 35 year concession, water treatment CGE Zunyi Water 

Shanghai 20 year ‘concession’, water provision Shanghai Fengxian Saur Water 

Beijing 23 year BOT, water treatment AWG 

Tiazhou 18 year BOT, bulk water provision AWG 

Harbin O&M, water treatment plant Bouygues 

Foshan 25 year BOT, wastewater treatment Aquamundo 

Chongqing 25 year BOT, wastewater treatment Aquamundo 

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Liuzhou 25 year BOT, wastewater treatment Global Green Tech 

Deqing 15 year BOT, water treatment Globe Environment 

Nanjing Industrial wastewater treatment BOT Nanjjng Sembcorp Suiyu 

Dao Bin Shan 23 year water treatment BOT Shenfei Dayen 

Shenyang Water and wastewater treatment BOT Shenfei Dayen 

Beijing Industrial water & wastewater treatment Shenfei Dayen 

Beijing 20 year sewage treatment BOT Kerry Utilities 

Jiangmen Wastewater treatment BOT AGEPSG 

Nanchong Water treatment concession Berlinwasser International 

Xian Water treatment BOT Berlinwasser International 

Shanghai 20 year wastewater treatment BOT Youlian 

Beijing Wastewater treatment BOT Beijing Capital 

Four cities Water treatment plant BOTs Cathay International Water 

Shenzen Bulk water concession GDI 

Donnguan Bulk water concession GDI 

Nanhai Water supply Nanhai Development 

Nanjing Wastewater treatment BOT SIHL 

Zhanjiang Bulk water treatment BOT SIHL 

Xiamen Water & wastewater concession SIHL 

Hanzhong Water BOT Interchina 

Qinhuangdao Wastewater BOT Interchina 

Xianyang Water BOT Interchina 

Ma’anshan Wastewater BOT Interchina 

Nanchang Water supply Jiangxi Hongcheng Waterworks 

Nanchang Wastewater BOT BWB (VE) 

Shandong Water operations Salcon Water 

Yichun 30 year water BOT PBA Holdings 

Zun Yi 35 year wastewater BOT VE 

Yuanping Wastewater & water reuse BOT Sino-Dutch WIG 

Zhumadian Water supply China Water 

Shandong Wastewater Salcon 

Danyang City 30 year wastewater treatment BOTs AEH 

City Study: Guangzhou (Canton) 

The Guangzhou Water Resources Bureau serves 92% of the central area’s 2,914,300 people through 

728,575 connections. All water connections are metered. Of the city’s sewage was treated in 1998, 

against an official target of 25%. In consequence, 2.7million tonnes of untreated effluent only 10% are 

discharged into the Pearl River daily and the local authority regards the river as biologically dead. A 

7% ‘Environment Tax’ is levied in hotels, but there is no indication of how these funds are used. In 

2002 Earth Tech was awarded a USD120million DBO contract that over two phases will treat 

0.4million m 3 of wastewater per day, or 15% of the current total discharge. 

Universal service provision in Macao 

In contrast to Hong Kong, where water management and provision remains under municipal control, 

the former Portuguese colony of Macao had two PSPs for its water and sewerage services between 

1985 and 1993. In 1996, the colony renewed the 1988 water provision concession for the Macao 

Water Supply Company (SAAM), for a further 25 years. The contract serves some 600,000 people via 

169,460 domestic customer connections. This was awarded to Sino-French Holdings, the joint 

venture between Suez (France) and New World Infrastructure (Hong Kong) who holds 85% of 

SAAM’s equity. 

Since 1982, non revenue water in Macau has fallen from 40% to 11% by 2005 while rising from 27% 

to 37% in Hong Kong. While water prices as charged in Hong Kong and Macau are level pegging at 

HKD4.2 per m 3 (0.54), since 1997 (MOP 4.39 / m 3 for Macau since 1999, HKD0.55), the actual cost of 

water services in Hong Kong are HKD11.0 per m 3 (HKD1.41) resulting in Hong Hong’s services 

making a loss compared with SAAM’s 28% return on equity in 2004. 

The water network has been extended from 127km in 1985 to 526km by 2005, with 90% of the 

original network having been replaced and the rest refurbished. The number of metered connections 

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also increased from 61,000 to 192,843, including 23,363 commercial, industrial and government 

accounts. 




Shenfei Dayen Dayen (Singapore) 0 125,000 125,000 

Kerry Utilities PPB (Malaysia) 0 1,000,000 1,000,000 

Nanjing Sembcorp Suiyu Sembcorp (Singapore) 0 0 0 

AGEPSG Guozhen EP (China) 0 5,000,000 5,000,000 

Berlinwasser International Marubeni (Japan) 0 2,000,000 2,000,000 

Pinang Water PBA (Malaysia) 500,000 0 500,000 

Sino French Holdings Suez (France) 12,900,000 1,500,000 14,400,000 

Vivendi Water VE (France) 18,250,000 455,000 20,050,000 

Sound Group Sound Group (PRC) 0 5,000,000 5,000,000 

China Evergreen Evergreen (China) 250,000 0 250,000 

Shanghai Lingqiao Tap Shanghai municipality N/A 0 N/A 


Shanghai Municipal Raw Shanghai municipality N/A 0 N/A 


Shenyang Public Utility Shenyang municipality 5,750,000 0 5,750,000 

Suzhou New District Suzhou municipality 100,000 0 100,000 

Wuhan Sanzheng Industry Wuhan municipality N/A 0 N/A 

AWI Awg (UK) 3,760,000 0 3,760,000 

Earth Tech Tyco Intl (USA) 150,000 750,000 750,000 

Shanghai Fengxian Saur Bouygues (France) 3,500,000 0 3,500,000 

China Water Company RWE (Germany) 1,900,000 2,500,000 4,400,000 

Cheung Kong Infrastructure Privately held (PRC) N/A N/A N/A 

Global Green Tech Global Green Tech (HK) N/A 800,000 800,000 

Aquamundo Amiantit (Saudi) N/A 400,000 400,000 

Globe Environment Darco (Singapore) 1,200,000 0 1,200,000 

Cathay International Water Cathay Intl (HK) 4,000,000 0 4,000,000 

Beijing Capital Group Beijing Capital (China) 12,000,000 5,500,000 12,000,000 

GDI GDI (HK) 1,500,000 0 5,800,000 

Nanhai Development Nanhai Development Co 1,100,000 0 1,100,000 

SIHL Shanghai Ind. Holdings 7,500,000 4,000,000 8,500,000 

CGE Zunyi Water VE (France) / Citic 500,000 0 500,000 

Interchina IH (HK) 900,000 900,000 1,800,000 

Jiangxi Hongcheng J H Waterworks 1,550,000 0 1,550,000 

W’works 

PBA Holdings PBA (Malaysia) 250,000 0 250,000 

Salcon Water Salcon Eng (Malaysia) 1,250,000 0 1,250,000 

Zun Yi VE (France) 0 600,000 600,000 

Tianjin Capital Env Protect Tianjin Environ (China) 1,200,000 11,350,000 11,350,000 

Xin Jiang Hui Tong Xinjiang HT (China) 380,000 0 380,000 

Xinjiang Urban Const Xinjiang Urban (China) N/A N/A N/A 

Sichuan Guangan AAA AAA Public (China) N/A N/A N/A 

Shenzhen Kondarl Shenzhen Kondarl (China) N/A N/A N/A 

Shanghai Young Sun Shanghai YS (China) 0 800,000 800,000 

Shanghai 

Urban Shanghai UCS (China) 0 3,000,000 3,000,000 

Construction Group 

Qianjiang Water Resources Qianjiang WR (China) 500,000 0 500,000 

Ningbo Fuda Company Ningbo Fuda (China) 750,000 0 750,000 

Anhui Water Resources Anhui Water Resources N/A N/A N/A 

Development Co 

Development Co (China) 

Panyao Asia Environment 1,000,000 1,000,000 1,200,000 

Holdings (Singapore) 

Boustead Singapore Boustead (Singapore) 100,000 0 100,000 

Sino-Dutch WIG Rabobank (Netherlands) / 

GreenTech Eng (China) 

150,000 250,000 250,000 

99 


CHINA 


Sources: 

ADB (2005) Final report on major issues and recommendations of PPP in the water sector in China, 

Asian Development Bank, Manila 

Browder G J (2007) Stepping Up: Improving the performance of China’s urban water utilities. The 

World Bank, Washington, USA 

EIU (2007) China Hand, Economist Intelligence Unit, London 

GWI (2007) Global Water Market 2008: Opportunities in Scarcity and Environmental Regulation, GWI, 

Oxford, UK 2007 

Lam, P-L (2003) A comparative study of water utilities in Hong Kong and Macau. Asian Water, 

December 2003, pp 19-22. 

Lee, S. (2003) The Transformation of the Shanghai Water Sector in the Reform Area: Social Actors 

and Institutional Change. PhD Thesis, SOAS, London University 

Macao Water (2005) Colours of Water, Colours of Life, 2004 Annual Report & Accounts 

Macao Water (2006) 2005 Annual Report & Accounts 

Macao Water (2007) 2006 Annual Report & Accounts 

OECD (2007) OECD Environmental Performance Reviews: China, OECD, Paris 

SEPA (2002-2006) Report on the State of the Environment in China, 2002, 2003, 2004, 2005 & 2006 

,StateEnvironmentalProtectionAgency,Beijing 

100 


COLOMBIA 


COLOMBIA 



USD2,740 


USD7,620 




PSP plans 

PSP has been supported since 1994, starting with Law Number 142 of 1994. This Law provides 

incentives for private firms to join local and regional authorities in the task of upgrading water, 

sewerage and sewage treatment services. In reality, PSP remained the exception until the passing of 

Law Number 226 of 1995. This established the basic rules for approval of each programme. This Law 

gives the company’s employees and retirees, as well as other employee-owned cooperatives, unions 

and organisations, the first option to purchase the entity. 

Population 

2007 (million) 44.9 

2020 (million) 55.0 



In urban agglomerations, 2050 86.0% 

Legal framework and service delivery 

Municipal water and sewerage entities serving a population in excess of 8,000 have been identified as 

potentially suitable for private sector management and investment. The Law on Environmental 

Principles (Law Number 99 of 1993) lays out various environmental and public health service 

objectives, which are to be administered by the Ministry of the Environment. A Vice Ministry of Water 

and Sanitation was created in 2006 to focus on policy development and implementation. 

A report by the Instituto de Hidrología, Meteorología y Estudios Ambientales, warns that 70% of 

Colombia's population may face water shortages within the next 15 years if water resources are not 

properly managed. Drought has already caused water shortages in 7 cities in Valle del Cauca, Huila, 

Boyaca, Norte de Santander and on the Atlantic coast. The three largest cities in Colombia, Bogotá, 

Medellin and Cali, officially have a service coverage of around 94% for piped water and 87% for 

sewerage. 

Superservicios, the public service regulator found in 2005 that 7.6million people were supplied with 

water unfit for human consumption in 2005, including 84% of the people served by systems for less 

than 10,000 residents (6.7million) against 4% served by larger systems (0.9million people). 

28.5million people, or 62% of the population in 2005 was served by 206 suppliers covering 312 

municipalities. 

Colombia’s Agua Transparente programme was launched in 2008, aiming to control the funding used 

in water projects and the implementation of initiatives, as well as supervising tenders related to water 

projects, in an effort to avoid corruption. This is in conjunction with USD599million being invested in 

waterworks in five departments during 2008. The government expects all 32 departments to have 

master water plans, covering water for human consumption, irrigation and industrial activities as well 

as sewerage and wastewater treatment, by 31 December 2008. 







In 2006, the water minister said that Colombia will have to invest some COP8.29trillion 

(USD3.46billion) in 2007-2010 to improve water and sewerage services. This is required to raise 

urban potable water coverage to 98.5% by 2010. In 2005, Colombia provided USD654million in 

101 


COLOMBIA 


funding. Colombia's government aims to provide 95% water coverage and 85% sewerage coverage in 

all urban areas by 2010. 

The Vice-Ministry of Water and Sanitation has budgeted USD5.2billion for 2008-10, including 

USD820million during 2008. The government plans to boost the proportion of people with access to 

water and sewerage in urban areas to more than 90% by the end of the decade. The government 

aims to hand over the management of urban water services in the provinces to private companies or 

corporatised entities through concession contracts over 20 or 25 years, via auctioning the concession 

contracts to private companies, which will commit to carrying out an investment plan over the ensuing 

two years of the current programme. The operating companies are expected to spend USD1.84billion 

out of the total USD5.2billion required. 

In October 2008, it was announced that Colombia plans to invest USD14.1billion on water and sewerage 

services between 2007 and 2019, including USD9.6billion on urban water and sewerage. By 2019, it is 

intended that 50% of all sewage will be treated. 

USDbillion 2007-10 2011-15 2016-19 

Urban water & sewerage 2.7 3.7 3.2 

Total water spending 4.5 5.4 4.2 

Source, BN Americas, 1 st October, 7 th October & 13 th October 20098 

In 2006 Bogotá applied for World Bank financing to support a USD60million urban upgrading 

program, the bank reported on its website. Nearly half of Bogotá's population still lives in informal 

settlements where they lack basic services and need improved housing, the bank said. 

In 2003, the World Bank has approved a USD16million loan supporting the Bogota Urban Services 

Project, which aims to improve water and sewerage services, particularly for residents in low-income 

areas. EAAB, the municipal utility will address efficiency and service quality issues through cost 

reductions and support greater private sector participation in its operations. At the same time, EAAB 

appointed three companies to undertake service operations in five areas of the capital. Aguas Capital, 

Agua Azul and EPM Bogota Aguas will cover the five zones. The agreements will run for five years 

and are worth an estimated USD127million in total. 

Concession awards to date 

According to the International Labour Organisation (ILO), by 1998 there had been two privatisations 

prior to the 1994 law and a further 10 since then. 15% of the population was served by private 

companies in 2006 and in 2004, out of the 1,500 urban water service provision entities, 125 were 

private sector players and 48 mixed public-private entities. 

In 2006 Aguas Cappital was awarded a COP600billion 15-year contract to operate potable water and 

sewerage services in Cúcuta city in Colombia's Norte de Santander department. Aguas Cappital's bid 

for the contract was based on an average water rate of COP30,000 (USD12.83) for consumption of 

19 m 3 per month. 

Freshwater 

Annual availability (1998) 1,070km 3 






Groundwater 



102 


COLOMBIA 


MAJOR CITIES 


Bogota 7,594,000 8,900,000 Sewage treatment BOT rescinded 

Cali 2,514000 2,963,000 Privatisation plans potentially revived 

Medellin 3,058,000 3,522,000 N/A 

Barranquilla 1,857,000 2,042,000 Privatisation under development 

Bucaramanga 1,019,000 1,201,000 N/A 

Cartagena 954,000 1,152,000 N/A 

Cucuta 852,000 1,012,000 Privatisation under development 

Private sector contracts awarded (Please see the relevant company entry for 

details) 


Bogota Water O&M Aguazul Bogota 

Santo Dominigo Water O&M Aguazul Bogota 

Santa Marta 20 year water and sewerage concession Tecvasa 

Barranquilla 17 year urban services concession Tecvasa 

Cartagena 25 year water and sewerage concession Agbar 

Monteria 20 year water provision concession Proactiva 

Tunja 20 year water provision concession Proactiva 




Agbar Agbar (Spain) 726,000 726,000 726,000 

Tecvasa Tecvasa (Spain) 1,770,000 1,770,000 1,770,000 

Proactiva FCC (Spain)/VE (France) 480,000 272,000 480,000 

Aguazul Bogota ACEA (Italy) 3,900,000 0 3,900,000 

Source: 

GWI (2008) Colombia kicks off USD5.2billion water upgrade plan, GWI, July 2008 

Superintendencia de Servicios Sanitarios (SSPD) (2008). Sistema Único de Información, SSPD, 

Bogota, Colombia 

World Bank (2008) Desarrollo Económico Reciente en Infraestructura (REDI) en Colombia, World 

Bank 

103 


COSTA RICA 


COSTA RICA 

Costa Rica had a population of 4.2million in 2002, 60% living in urban areas. The Instituto 

Costarricense de Acueductos y Alcantarillados (AyA) is the state water authority. AyA provides 

potable water to 90% of the country's population, including 99% coverage in urban areas. In the 

metropolitan area, 69% of the population with potable water also have adequate sewer systems. On a 

national level, 45% of the population with potable water also have adequate sewer systems. In 

contrast, 5% of wastewater receives any form of treatment. 

In 2003, a project sponsored in 2002 by the Inter-American Development Bank (IADB) to upgrade and 

manage wastewater service infrastructure in San José was cancelled. The project is now expected to 

be relaunched by the World Bank. It sought to expand and rehabilitate the sewerage system in a 

metropolitan area of San José. Under the concession approach, the project would have required an 

estimated USD280million to upgrade the infrastructure and build a major WWTW with the financing 

provided by a mix of international institutions and commercial banks. Following a change of 

government in 2002, there was a change in the management of AyA, which gave opponents the 

opportunity to derail the project. The current proposals are understood to focus on a DBO project, 

rather than an outright concession. Finance would come from a World Bank loan. 

Historically, over 60% of the finance for capital projects came from the government, but this is being 

reduced to 40% through improved operational efficiency and tariff collection. Between 1990 and 2006, 

USD203million were invested in water supply and sanitation infrastructure. In 2002 AyA proposed a 

sector modernization program running to 2020 which envisages maintaining urban water coverage 

while urban sewerage coverage to 89% by 2020. Total capital spending (including rural services) will 

be USD1.6billion, some USD80million per year. 

104 


CUBA 


CUBA 

Population 

2007 (million) 11.2 

2020 (million) 11.4 


Urbanisation by 2020 77% 



In 1996, piped water was provided to 97.9% of the urban population and 75% of the rural population. 

The 2000 target was for 99.9% coverage for urban areas and 100% coverage for rural areas against 

95% and 78% respectively in 2004. Sewerage covered 94.6% of the urban population and 78.2% of 

the rural population in 1996. Coverage targets for 2000 were 99.9% and 98.9% respectively, against 

99% and 95% in 2004. 22% of urban sewage effluents are treated at five secondary sewage 

treatment works. 







Capital spending plans 

In 1996, the government announced that it was aiming for the treatment of all urban sewage effluents 

over the next ten years at a total cost of USD643million for rehabilitating the extant sewerage system 

and sewage treatment works, plus a further USD747million for service extension. Total capex needs 

for water provision are estimated at USD1.5billion. 

Freshwater 




Domestic 49% 

Industrial 0% 


MAJOR CITIES 


Havana 2,189,000 2,151,000 Agbar O&M 

Urban water and sewerage 

1981 Piped water Indoors Sanitation Flush 

Havana 100% 90% 98% 97% 

Santiago de Cuba 96% 76% 97% 62% 

Camaguey 88% 63% 97% 57% 

Holguin 64% 40% 92% 37% 

Groundwater 


Per capita 720m 3 


Agbar and privatising Havana’s services 

Interagua formed Aguas de La Habana, a JV with the Cuban Government in 1999, for two water 

management contracts currently serving 500,000 people, with an eventual coverage of 1,400,000 

people. The contracts serve La Havana and the resorts of Cayo Coco and Varadero. Water supply 

105 


CUBA 


systems in Havana were renovated for 298,000 people in 2001-02. The 25 year water management 

contract for Havana is being supported by a USD24.7million loan by Agbar. Revenues are 

USD9million pa for 115million m 3 of water provided annually. 

Service development in Varadero and Havana 

Varadero 1994 2006 

Population covered 95% 100% 

Hours service/day 18 24 

Number of connections 5,000 11,000 

Havana 2000 2006 




Source: 

Presentation by José María Tura, General Manager of Aguas de La Habana to Agbar conference 

“Five international examples of environmental management in the service of the citizens” on 19th 

June 2007. 

106 


ECUADOR 


ECUADOR 



USD2,840 


USD4,400 




International support 

In 1999, the Municipal Water and Wastewater Company of Quito started a USD170million service 

provision upgrade project to provide improved water and sewerage for 600,000 people. The work is 

being supported by a loan from the IADB. The IADB is also providing USD41million out of 

USD51million being spent on water and sewerage rehabilitation work in Guayaquil by Ecapag. 

Population 

2007 (million) 13.0 

2020 (million) 16.0 

Urbanisation in 2007 65% 


In urban agglomerations, 2050 82% 

A tradition of municipalities operating as autonomous entities has in turn held back the regulation 

required to drive forward investment. Attempts since 1996 to create a national water regulator have 

been thwarted. Water losses are 40-50% and in one case 70% or even higher, including illegal 

connections. Due to local political pressure municipal utilities are unwilling to increase rates to replace 

pipes. 







Freshwater 

Annual availability (1998) 442km 3 






The Guayaquil concession 

A 30 year concession for water and sewerage services for the city of Guayaquil was gained by 

International Water’s Interagua in 2000. Water provision by Empresa Cantonal de Agua Potable y 

Alcantrillado de Guayaquil (Ecapag) will rise from 63% in 2000 to 95% by 2011, with 55,238 new 

connections in poor areas during the first five years and sewerage coverage increasing from 53% to 

90% by 2020. The Inter American Development Bank provided a USD30million loan in 2001 for the 

initial works programme in 2002-03. Although the privatisation of Quito’s services has been 

considered on an informal basis in recent years, political constraints remain an obstacle. From 

June 2006, an extra USD30million is being invested by Interagua on an additional 8.56km of pipelines 

beyond the concession contract. This has been enabled by higher than expected tax revenues for 

telephone services. 

Groundwater 



107 


ECUADOR 


Service provision in the main cities 

Piped water Indoors Sanitation Flush 

Quito 85% 70% 97% 93% 

Guayaquil 61% 41% 95% 42% 

Cuenca 96% 86% 95% 93% 

Machala 63% 42% 92% 76% 

MAJOR CITIES 


Guayaquil 2,387,000 2,975,000 Water & wastewater PSP 

Quito 1,514,000 1,839,000 PSP under consideration 

Ecuador's president-elect Rafael Correa announced in 2006 that the government needs to invest 

some USD3billion. Responsibility for this will be handed over to provincial governments, which will 

request the corresponding loans from the state bank. PSP has been ruled out for the time being. 

Overall, 68% of the urban population in 1999 was considered to have access to safe drinking water 

and 48% to have adequate sanitation. It is of interest to note that the connection to indoor taps and 

lavatories in many medium sized towns is higher than in Quito or Guayaquil. Some 5% of Quito’s 

sewage effluents are subject to treatment. 



Samborondón Water & sewerage services Tecvasa 

Guayaquil Water & wastewater concession ECAPAG 

Empresa Metropolitana de Alcantarillado y Agua Potable (Emaap), Quito's water utility intends to 

award a USD600million 20 year water and power BOT, to supply the city with water and power via a 

109km water channel from the Valle Vicoso River to its Bellavista water treatment plant. The 

population of Quito is forecast to double by 2020. The Inter-American Development Bank approved a 

USD40million loan to Emaap in September 2002 to support the first phase of a USD110million 

programme to expand water and sanitation services and reduce flooding and landslides. This will 

enable Emaap to extend water and sewerage service to low-income sectors of the population. Manta 

(Manabi Province) is seeking to privatise Eapam, its water utility, which serves 200,000 people. 

Guayas and Pinchincha Provinces are also examining PSP options. 

It is currently anticipated that a 30 year concession for Emaap will be awarded in 2007, with four 

bidders pre-qualified with a minimum investment of USD185million being required. 




Tecvasa Tecvasa 100,000 100,000 100,000 

ECAPAG Edison (Italy) 2,500,000 2,500,000 2,500,000 

108 


INDIA 


INDIA 



USD820 


USD3,800 


Industry 28% 

Services 55% 

Politics and Government 

The pace of progress is summed up by the National Water Resources Council, which was formed to 

address urgent state and national water issues. It has met four times since 1983 and no decisions 

have yet been made on updating the 1988 national water policy. 

India’s National Water Policy of 2002 places drinking water as its chief priority (ADB, 2007). The 

Jawaharlal Nehru National Urban Renewal Mission (JNNURM) aims to channel USD12billion of 

central funding into 63 identified cities between 2006 and 2012, with an emphasis on urban 

infrastructure planning and capacity building and O&M cost recovery by 2012. India aims to achieve 

100% urban water coverage during its 11 th Five Year Plan (2007-12). 

India originally planned to have universal access to water by 1997, the 50 th anniversary of its 

independence. According to WHO and UNICEF data, urban water coverage was 81% in 1991 and 

89% in 2004, while the 2001 Census of India found 50% of households had a tap within their 

premises, 19% with a tap near their premises and 16% had access to a hand pump. The revised 

National Water Policy of 1987 was adopted by the National Water Resources Council on 

1 st April 2002. It states that “adequate drinking water facilities should be provided to the entire 

population” (Article 8) and that PSP “should be encouraged…wherever feasible” (Article 13). Source: 

ADB (2007) Country Paper: India. Asian Water Development Outlook, ADB, Manila 

For cities, water and sewerage policy is carried out at three levels: central government, the member 

states and city government. Central government directs overall policy. The Ministry of Environment 

and Forests (MEF) oversees the Central Pollution Control Board (CPCB) and the National Rivers 

Conservation Directorate (NRCD). The CPCB is backed by the 1974 Water (Prevention and Control of 

Pollution) Act and sets national environmental standards (individual states are free to exceed them) 

and policy. Each State Pollution Control Board in turn reports to the CPCB, while being responsible 

for ensuring compliance with the government’s environmental law. The Water (Prevention and Control 

of Pollution) Cess Act 1977 compels specified industries to pay fees to the relevant State Pollution 

Control Boards for water consumed. The 1995 Water Information Act puts the centralisation of water 

data on a statutory basis. The NRCD is involved in the various River Action Plans designed to 

improve the water quality of India’s 14 main water basins. 

The MUD (Ministry of Urban Development) advises all state level plans. It examines proposals and 

provides guidance. Plans, when approved are forwarded to the Ministry of Finance and the Dept of 

Economic Affairs for external support, for example via the World Bank and the Asian Development 

Bank, along with the ODA on a more local basis. Cities are autonomous from central government with 

regard to privatisation policy. The MUD is positive about privatisation on an O&M and BOT basis, 

reflecting their concern about the pace of sanitation projects. The cities of Delhi, Bombay (Mumbai), 

Calcutta, Hyderabad, Bangalore and Madras can set their own tariffs. 

The MUD water provision targets are 110L/day for cities and 270L/day for Delhi. In 1992, it was found 

that the average per capita water supply for Class I towns (100,000 and above) was 147L/day and 

78L/day for Class II towns (50,000 to 100,000). 

Only connect? 

The Indian Government is considering a scheme to link 37 of the country's rivers into the canal 

network at a cost variously estimated in 2003 at USD116-200billion against an estimate of 

USD68billion in 1995. To date, nine years of feasibility studies have taken place and construction 

would take a further 14 years to complete. Bangladesh has raised objections about the losses that the 

project would entail. 

109 


INDIA 


Population 

Total 2007,million 1,049.5 

Total 2020million 1,246.4 

In urban areas 2007 29.2% 

In urban areas 2020 34.3% 



According to the Ministry of Rural Development, 1.2million out of 1.4million villages, or 89% had 

access to water in 2002, with INR340billion (EUR7.45billion) having been spent on various drinking 

water projects across the country. The UNICEF 2000 estimate for access to safe drinking in rural 

areas in India was 79%. The Government had set a target of providing universal rural drinking water 

connections by March 2005, drinking water for the urban population by March 2007 and improved 

sewerage for 75% of the urban population by March 2007. 

According to the WHO/UNICEF reports in 2004 and 2006, this is most unlikely as data from the 

Governmental Planning Committee of India found that the coverage of rural water in 1991 was about 

55% and in 2004 it had risen to just above 73%. 

Water and sanitation, India (million people) 

1991 1991 2004 2004 

Coverage Uncovered Coverage Uncovered 

Rural Water 55.54% 44.46% 73.2% 26.8% 

348.8million 279.2million 542.4million 198.6million 

Rural Sanitation 6% 94% 

38million 596million No data No data 

Urban Water 81.38% 18.62% 89% 11% 

176.6million 40.4million 267million 33million 

Urban Sanitation 44% 56% 63% 37% 

124million 158million 189million 111million 

Data from the 2001 Census of India is still being processed, but information on household 

connections has been released. 

Urban households: Sanitation 

Water closet 46.1% 

Pit latrine 14.6% 

Other latrine 13.0% 

Internal sanitation 73.7% 

Closed drainage 34.5% 

Open drainage 43.4% 

No drainage 22.1% 

Urban households: Drinking water 

Tap 68.7% 

Hand pump 16.2% 

Other 19.1% 

Tap – within premises 49.7% 

Tap – near premises 15.1% 

Tap – away 3.9% 

For Class 1 cities, 73% of water is abstracted from surface water, 23% from groundwater and 4% 

from combined sources. For cities in major river basins, these are 68%, 30% and 2% respectively, 

and for cities in coastal areas, 87%, 3% and 10%. Overall, 32% of usable groundwater resources are 

currently being extracted. 

Spending on water and sanitation has increased in recent years and this trend is set to continue. The 

estimated cost will be INR204,898million, with INR83,506million coming through the World Bank and 

INR18,060million from Hudco. Both the timings and the costs are likely to be on the optimistic side, 

110 


INDIA 


with universal access to potable water unlikely before 2015 and sanitation taking another decade. The 

real cost for access to water is likely to be in the region of INR400-800billion and a further 

INR500-1,000billion for sanitation and wastewater treatment. 







City utility performance 

A study co-sponsored by the Asian Development Bank in 2007 has provided a significant amount of 

data about water and sewerage services in India’s leading cities. 

Water service coverage 

Coverage Availability UFW Metering 

(%) (hours/day) (%) (%) 

Ahmadabad 74.5 2.0 N/A 3 

Amritsar 75.7 11.0 57 4 

Bangalore 92.9 4.5 45 96 

Bhopal 83.4 1.5 N/A 0 

Chandigarh 100 12.0 39 79 

Chennai 89.3 5.0 17 4 

Coimbatore 76.1 3.0 41 100 

Indore 77.3 0.8 N/A 0 

Jabalpur 75.2 4 14 0 

Jamshedpur 74.4 6.0 13 1 

Kolkata 79.0 8.3 35 0 

Mathura 70.0 2.0 N/A 0 

Mumbai 100.0 4.0 13 75 

Nagpur 91.5 5.0 52 40 

Nashik 92.6 3.5 60 80 

Rajkot 98.1 3.5 23 0 

Surat 77.4 2.5 N/A 2 

Varanasi 77.7 7.0 30 0 

Vijayawada 70.5 3.0 24 6 

Visakhapatnam 49.2 1.0 14 1 

Average 81.2 4.3 32 25 

111 


INDIA 


Water production and people covered 

Water production Connections People served 

(m 3 per day) 

Ahmadabad 623,836 556,734 3,716,624 

Amritsar 171,005 127,786 804,455 

Bangalore 923,090 486,850 4,978,330 

Bhopal 258,000 105,012 1,418,460 

Chandigarh 381,280 139,300 1,150,000 

Chennai 623,836 344,079 2,364,725 

Coimbatore 228,400 113,762 799,000 

Indore 83,000 159,104 1,700,000 

Jabalpur 175,115 46,260 790,000 

Jamshedpur 370,110 38,800 458,000 

Kolkata 971,560 262,839 3,948,000 

Mathura 38,172 24,643 238,000 

Mumbai 3,200,000 309,226 13,000,000 

Nagpur 608,220 265,231 2,227,990 

Nashik 310,000 127,562 1,250,000 

Rajkot 143,836 183,879 983,000 

Surat 554,685 310,836 2,954,000 

Varanasi 270,000 114,907 1,243,000 

Vijayawada 131,833 78,298 600,000 

Visakhapatnam 228,451 85,668 750,000 

Sewerage and sewage treatment 

Sewerage services are defined as operating on two levels. 'Sanitation' refers to lavatories with a two 

septic tank composting system. 'Sewerage' refers to mains sewerage. Access means at least a public 

lavatory in the same street. 

The sewerage connection figure stated refers only to the 212 Class I cities (a population of 100,000+, 

covering 102.9million people in 1988). In class 1 cities, 20% of effluents are treated (13% secondary 

and 7% primary). In Class II cities (50,000-100,000), covering a further 20.7million people, 0.4% 

sewage is subject to primary treatment and 1.7% to secondary treatment. There are no other 

identified sewage treatment works in India. Overall, 8 out of 3,119 towns and cities have complete 

sewerage and sewage treatment services. 20% of towns and cities have partial service coverage. 

In 2002, 20% of people in urban areas had access to water-flush toilets connected to a sewerage 

system and 14% use water-borne toilets connected to septic tanks or leach pits. In rural areas, 20% 

have access to sanitary toilets. 

Informal examinations of the 14 major river basins in the 1990s found that 30% of their length is of I-II 

quality and 70% is of III-IV quality. Some sources maintain that the 70% figure refers to Class IV only. 

Sewage effluents are estimated to account for 75% of the wastewater volume and 50% of the total 

pollution load. 

The politics of PSP 

India’s exceptionalist tradition means that the onus lies with foreign investors to argue the merits of 

their proposals in Indian terms. The National Rivers Conservation Directorate is willing to support BOT 

bids as part of its future policy. A number of states and cities, including Harayana state, Calcutta and 

the Ganges Basin are understood to be keen to look at STW BOTs. In contrast, the Government 

seeks private sector investment first in the area of drinking water. 

The Congress Party has indicated that it supports international involvement for drinking water 

provision and sewage treatment projects. As part of the 2004 budget, the Government announced 

plans for a desalination plant in Chennai. This would be the first of a series of such plants to be built 

near Chennai, the coastal capital city of the southern Indian state of Tamil Nadu in 2004. The project 

will be financed through a public-private partnership. The INR10billion (USD217.39million) plant would 

have a capacity of around 300millionL per day. It was also emphasised that public-private 

partnerships will be encouraged for the expansion of water supply and sanitation. A Board for 

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Reconstruction of Public Sector Enterprises (BRPSE) will advise the Government on the measures to 

be taken to restructure PSEs, including cases where disinvestment or closure or sale is justified. 

The Accelerated Rural Water Supply Programme (ARWSP) has been allocated INR26billion in 

2004-05. It will focus on renewal of water sources and on serving uncovered and partially covered 

habitations. The Urban Water Supply Programme will also spend INR1.5billion in 2004-05 on projects 

in 2,151 small towns. 

The BJP at the national level has also stated that it supports the PSP of utilities, allied with foreign 

investment. Local BJP administrations such as the Mumbai Municipal Council will not necessarily 

support PSP. The Left Front remains ambiguous about foreign investment. Their stance is that foreign 

investors ought to demonstrate that India will benefit from their actions. The swadeshi (self-reliance) 

approach is losing favour, with only a small proportion of middle-income families supporting it. 

Outsourcing work in progress 

Progress has been made in some areas. Involving the private sector in the contracting out of 

operation and maintenance (O&M) work has been gathering in popularity in India. In Madras, 

contracting out sewerage O&M since 1993 has resulted in savings of 20%. In Ajmer (Rajasthan), a 

service contract for water piping, pumping and treatment O&M has been regarded as a success, while 

Hyderabad has contracted out staffing for water treatment O&M work. Proposals for private sector 

management in Goa and the cities of Tirupur and Dewas are also currently under active 

consideration. The partial PSP of Tirupur’s services has suffered from severe underfunding to date. 

The Tirupur water provision BOT was meant to get the go-ahead in March 1999, but has suffered 

from delays. This is due to a lack of support from industrial customers, who prefer irregular supplies of 

tankered water than the INR45 per 1,000L to be charged. The INR11.6billion project involves bulk 

water provision, followed by water distribution and sewerage with a 30 year concession period. The 

Goa project is for abstracting water at source, transporting it 60km to a reservoir and handing it over 

to the municipality. In addition, the management of the sewerage network will be put out to private 

sector operation. This project has been under development since early 1997. 

In Bangalore leakage detection and strategic planning is partially outsourced and private detectives – 

paid only by results – are employed to detect illegal water connections. Similarly Chennai Metro has 

also shared its use of service contracts. Such cities say they have contracted out between 50% and 

100% of the management of water treatment plants, pumping stations and wastewater treatment 

plants and that this has generated cost savings of between 10% and 50%. 

Freshwater 

Total (1998, km 3 ) 1,850.00 

Per capita (1998, m 3 ) 1,896 


For domestic use (1987) 5% 

For industry (1987) 3% 


Water supply and demand 

If current trends over the next 50 years continue, the Tata Energy Research Institute (TERI) predicts 

that India's rivers and lakes will no longer be able to meet the demand for water from the country's 

1.57billion people. Water availability per person has already gone down from 6,000m 3 in 1947 to 

2,000m 3 in 1997 and could fall to 760m 3 by 2047. India currently has a national average of 2,464m 3 

per capita, although in some regions it is as low as 411m 3 . India will become a water-scarce nation by 

2050 unless urgent steps are taken that go beyond government capital investment in irrigation 

projects. In three agro-ecological zones (Western plains and Kachch, Northern plains, and the Bengal 

and Assam plains), the availability of water in 2047 will be less than 75% of the demand. Although the 

greatest demand for water will still come from agriculture, domestic water demand will increase from 

20,000million m 3 in 1997 to about 41,000million m 3 per year in 2047. Moreover, the demand will be 

concentrated in the cities and will be for water of higher quality. 

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Demand by industry 

1970 6million MI 




Pricing 

Water was traditionally seen as God’s gift both by Hindus and Muslims. This means that there is 

considerable pressure at the local and rural level for it to be provided as a free (or nominally priced) 

resource, especially for domestic use. The 74 th constitutional amendment gives local authorities the 

responsibility for planning, operating, maintaining and upgrading water supply, sewerage and 

sanitation services. Funds have to be raised by the authority, which also has the right to determine 

and enforce its own charges. In many cases, attempts to start operating water services on a self 

financing basis have focused on using higher industrial charges to cross subsidise domestic fees. 

Given the small size and uneven distribution of India’s industry, this approach has not met with great 

success to date. 

Economics; operating spending, income and capital spending 

O&M spend pa Revenues pa 5 year Capex 

(INRmillion) (INRmillion) (INRmillion) 

Ahmadabad 318 223 1,189 

Amritsar 224 172 212 

Bangalore 3,414 4,255 1,918 

Bhopal 283 100 21 

Chandigarh 548 404 526 

Chennai 1,388 3,127 17,343 

Coimbatore 111 135 543 

Indore 881 165 543 

Jabalpur 104 62 200 

Jamshedpur 328 532 188 

Kolkata 1,229 260 2,954 

Mathura 28 9 88 

Mumbai 4,284 8,789 7,581 

Nagpur 424 562 953 

Nashik 215 182 809 

Rajkot 149 92 792 

Surat 368 N/A N/A 

Varanasi 183 141 65 

Vijayawada 104 91 80 

Visakhapatnam 412 525 1,667 

The Water (Prevention and Control of Pollution) Cess (Amendment) Bill introduced in 2003 seeks to 

strengthen the financial resources of pollution control boards and promote water economy by 

factories. The tax was last increased in 1991, resulting in a rise in annual income from INR81.3million 

to INR637.8million in 2000. The new charges are expected to bring in around INR2billion a year. State 

Pollution Control Boards will receive 80% of tax revenues, with Delhi retaining the balance for the 

central pollution control agencies. The tax will be applicable to all industries, except hydropower and 

seeks to encourage water conservation. 

Delhi’s fundamental financial challenge 

Annual operating costs for the Delhi Jal Board (DJB) have gone up from INR2.76 billion 

(USD61million) in 1998 to INR7 billion (USD154.7million) by 2003. DJB has annual revenues of 

INR2.30billion (USD50.8million) and debts of INR36 billion (USD795million) and INR16.2billion 

(USD357.8million) in interest liability. Legislation will be sought in order to establish a Delhi Water 

Regulatory Commission, the first such water structure to be formed in any Indian state. About 85% of 

water supplies serve residential consumers who pay INR0.53 (GBP0.006) per m 3 . As 75% of 

municipal connections are unmetered, there is a need to consider metering before tariff rationalisation 

114 


INDIA 


can be implemented. The unregulated private sector thrives under these conditions in Delhi, with 

1,200 private tankers INR100 (USD2.20) per m 3 . Although DJB will be corporatised, politicians have 

ruled out any material private sector involvement. 

Groundwater 


Per capita (1998, m 3 ) 359 





The private sector and privatisation 

The Eighth Five Year Plan aimed for expenditure for water and sanitation services to increase from 

0.56% to 3.80% of total public sector expenditure, with a total public sector outlay on water supply and 

sanitation for urban areas of INR57.6billion. The total investment requirements for water supply and 

sanitation based on various reports indicate that an investment of INR254.9billion is required for 100% 

coverage of urban water supply and sanitation. In consequence, there is a broad realisation that 

private sector financing and management is now needed in India. The average annual investment on 

O&M of urban water supply and sanitation systems has been estimated at INR23.87billion (for a 

population of 217million at INR110 per capita). 

In 2002, the Tata Energy Research Institute recommended that the state of Gujarat considered some 

form of PSP in seeking to meet its INR8,600million spending needs for basic urban water supply. The 

institute believes that all PSP models are applicable under current state laws. 

In 2003, the state government of Karnataka examined privatising urban drinking water supply and 

Jharkhand issued a notice seeking private investor participation of in water supply in Ranchi, 

Dhanbad, Chas, Mango and Adityapur towns. 

Bulk water provision projects proposed to date 

City 

Cost 

Type Security Status 

(INRmillion) 

Bangalore, Karnakata 13,000 BOOT State guarantee Evaluation stage 

Cochin 4,000 BOT State guarantee Abandoned 

Hyderabad, Andhra Pradesh 5,000 BOOT State guarantee Abandoned 

Panjum, Goa 3,000 BOOT State guarantee Re-evaluation 

Pune, Maharashtra 7,500 BOT Debt from state Abandoned 

Tirupur, Tamil Nadu 15,000 BOT State guarantee Operational 

Chennai, Tamil Nadu 10,000 BOT State guarantee Evaluation stage 

Indian companies noted 

Four contract awards to Indian companies have been identified, three of which are in operation. 

IVRCL [1]: Alandur wastewater treatment 

First STP Private Ltd (95% held by IVRCL) is a JV with VA Tech Wabag. It is developing a 12,000m 3 

per day (4.4million m 3 pa) WWTW at Perungudi for Alandur Municipality, where IVRCL has installed 

the underground sewerage system. The WWTW has been completed and the households need to be 

connected to the system by the municipality. 

IVRCL [2]: Chennai desalination 

In August 2005, IVRCL was made the preferred bidder for the INR5billion contract to build a 

100million L/day water desalination plant for Chennai Metro Water Supply & Sewerage Board, and 

operate it for 25 years. This is India’s first desalination project, the completion of which has been 

delayed to 2008 over funding and political issues. 

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BHEL: Chennai WWTW 

In September 2003, BHEL gained a wastewater treatment construction and operations contract in 

Chennai. The INR364million (USD7.9million) contract was awarded by the Chennai Metropolitan 

Water Supply and Sewerage Board (CMWSSB). Construction will take 18 months, with the facility 

entering service by early 2005. BHEL will also look after Operation and Maintenance (O&M) of the 

plant for ten years, post commissioning. The sewage treatment plant will have its own power plant 

which will be run by biogas, generated within the facility, making it self-sufficient and lowering 

operating costs. 

Larsen & Toubro: Visakhapatnam bulk water 

In Andhra Pradesh, work has started on the Visakhapatnam Industrial Water Supply Project. This is a 

55.5km pipeline from the River Godavari to augment the 153km Yeleru Left Bank Canal. Some 15% 

of the output is going to domestic consumers. These are subsidised by Visakhapatnam Municipal 

Corporation for three years, charging INR8 per m³ against an actual cost of INR24 per m³. 

Larsen & Toubro has a 32 year concession for operating the pipeline, with equity financing from the 

municipality (Andhra Pradesh Industrial Infrastructure Corporation) and from the private sector; 

L&T Holdings and PSL Holdings, with a permitted return of 15% over the concession. Political 

changes in Andhra Pradesh may threaten the project. 

Radius: Cancelled bulk water project 

In 1998, Radius Water Company signed a 22 year BOT contract to deliver 4millionL of water a day to 

a 23km industrial belt along the Seonath River in Chattisgarh state. The state wishes to terminate the 

contract, which was signed two years before Chattisgarh became a separate state from Madhya 

Pradesh (Source: GWR, 170, 2003). Some INR250million has been spent by Radius Water to date, 

but it is alleged that water demand is materially below what had been expected. In April 2003, the 

state of Chattisgarh cancelled the concession. 

MAJOR CITIES 


Agra 1,511,000 1,892,000 N/A 

Ahmadabad 5,120,000 6,298,000 Considering private sector involvement 

Allahbad 1,152,000 1,420,000 N/A 

Asanol 1,257,000 1,584,000 N/A 

Amristar 1,151,000 1,444,000 N/A 

Aurangabad 1,048,000 1,336,000 N/A 

Bangalore 6,462,000 7,939,000 Bulk water project under development 

Bhopal 1,644,000 2,046,000 N/A 

Bombay (Mumbai) 18,336,000 22,645,000 Political opposition to private sector for now 

Calcutta (Kolkata) 14,299,000 16,798,000 N/A 

Chandigarth 928,000 1,170,000 N/A 

Coimbatore 1,618,000 2,005,000 N/A 

Delhi 15,048,000 18,604,000 One water treatment BOT 

Dhanbad 1,189,000 1,477,000 N/A 

Durg-Bhilainagar 1,043,000 1,305,000 N/A 

Faridabad 1,298,000 1,685,000 N/A 

Ghaziabad 1,236,000 1,634,000 N/A 

Guwahati 932,000 1,174,000 N/A 

Gwalior 940,000 1,156,000 N/A 

Hubli-Dharwad 855,000 1,054,000 N/A 

Hyderabad 6,115,000 7,420,000 Bulk water scheme abandoned 

Indore 1,913,000 2,413,000 N/A 

Jabalpur 1,231,000 1,519,000 N/A 

Jaipur 2,747,000 3,470,000 N/A 

Jamshedpur 1,238,000 1,542,000 JUSCO (asset owning, privatised since onset) 

Jodhpur 951,000 1,181,000 N/A 

Kanpur 3,018,000 3,718,000 N/A 

Kochi (Cochin) 1,463,000 1,785,000 Bulk water scheme abandoned 

Kozhikode (Calicut) 924,000 1,119,000 N/A 

Lucknow 2,566,000 3,180,000 N/A 

Ludhiana 1,571,000 1,954,000 N/A 

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MAJOR CITIES 

Madras (Chennai) 6,915,000 8,092,000 Desalination & wastewater treatment projects 

Madurai 1,254,000 1,514,000 N/A 

Meerut 1,328,000 1,662,000 N/A 

Mysore 852,000 1,049,000 N/A 

Nagpur 2,350,000 2,885,000 Considering private sector involvement 

Nashik 1,381,000 1,769,000 N/A 

Patna 2,029,000 2,578,000 N/A 

Pune (Poona) 4,409,000 5,524,000 Bulk water scheme abandoned 

Rajkot 1,185,000 1,513,000 N/A 

Ranchi 989,000 1,247,000 N/A 

Solapur 1,002,000 1,263,000 N/A 

Srinagar 1,087,000 1,353,000 N/A 

Surat 3,557,000 4,623,000 N/A 

Thiruvananthapuram 926,000 1,118,000 N/A 

Tiruchchripalli 915,000 1,123,000 N/A 

Vadodara 1,675,000 2,077,000 N/A 

Varanasi (Benares) 1,303,000 1,589,000 N/A 

Vijayawada 1,094,000 1,341,000 N/A 

Viskhapatnam 1,465,000 1,804,000 Bulk water transfer 

International contract awards 

Ondeo Degremont: Water treatment BOT 

Ondeo Degremont gained a 10 year BOT contract for a 0.635million m 3 per day treatment plant at 

Sonia Vihar in New Delhi in 2001. The contract is worth INR2billion (EUR50million). It is understood 

that the contract is now in operation. 

UUI: Tirupur bulk water BOT 

The Tirupur project is now in operation. The USD220million BOT (including USD140million in 

construction cost) water scheme, first proposed in 1994, aims to deliver 0.185million m 3 per day, 

two-thirds of which will go to supply about 1,000 Tirupur textile mills, the rest to domestic customers 

supplied through the municipal corporation. Industrial customers will pay INR45 per m 3 and domestic 

customers INR5 per m³, replacing around 400 water tankers. The BOT is being operated by Mahindra 

Realty and Infrastructure Developers Ltd, and United Utilities International, with funding from a 

USD222million rupee-denominated debt and equity package. 

Degremont: Chennai water O&M 

Degremont was awarded a contract for the construction of the 530,000m 3 /day of drinking water 

treatment plant serving 4million people for the Chennai Metro Water Supply and Sewerage Board in 

July 2005. The total cost of EUR25.2million is being financed with EUR6.6million from a French State 

protocol and EUR18.7million from the Tamil Nadu Urban Finance and Infrastructure Development 

Corporation. This is India’s largest water treatment works and the first to be fully operated by Suez. 

The operating contract runs from 2007-14. 

Veolia: joint venture with Doshion 

Veolia has been actively seeking to enter the Indian water contract market since the mid 1990s. The 

company entered into a joint venture with Doshion, an Indian water engineering company with 

revenues of USD50million in 2007. Doshian Veolia Water Solutions (70% Doshian, 30% Veolia 

Water) was formed in 2008 to provide a more effective market entry strategy. 

Forthcoming contracts 

GWI (July 2008) notes three PSP contracts currently under development: 

Guwahati (Assam) – an urban water supply system, sewerage system and stormwater drainage 

system for the Guwahati Metropolitan Development Area at a total cost of INR17.6billion. This 

includes a new 107,000m 3 /day water treatment plant and distribution network at a cost of 

INR2.8billion. 

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Bhilwara & Soniyana industrial water supply (Rajasthan) – to supply water to existing industries in the 

city of Bhilwara, and to develop integrated water supply and effluent treatment for a new textile park at 

Soniyana. USD70million of the projected USD100million is to be provided by the private sector. 

Jalore (Rajasthan) – a water distribution system for the towns of Jalore and Barmer and another 

256 villages in western Rajasthan, providing a total of 80,000 m 3 /day for USD200million. 



Tirupur 30 year bulk water BOT UUI 

Delhi 10 year water treatment BOT Ondeo Degremont 

Visakhapatnam 32 year bulk water concession Larsen & Toubro 

Alandur 10 year WWTW BOT First STP 

Chennai 10 year WWTW BOT BHEL 

Chennai 25 year desalination BOT Chennai Water Desal 

Chennai 7 year water treatment O&M Ondeo Degremont 

Kolkata 30 year BOT JUSCO 

Jamspedpur Asset owning JUSCO 

Jamshedpur 4 year O&M JUSCO 

Hamldia 25 year BOT JUSCO 




UUI United Utilities (UK) 600,000 0 600,000 

Ondeo Degremont Suez (France) 5,000,000 0 5,000,000 

Larsen & Toubro Larsen & Toubro (India) 500,000 0 500,000 

First STP IVRCL (India) 0 100,000 100,000 

Chennai Water Desal IVRCL (India) 1,000,000 0 1,000,000 

BHEL BHEL (India) 0 100,000 100,000 

JUSCO Tata Steel (India) 1,030,000 530,000 1,030,000 

Sources: 

ADB (2007) 2007 Benchmarking and Data Book of Water Utilities of India. Ministry of Urban 

Development, ADB, Manila 

Munjee, N. (2000). Privatisation of water & sewerage projects in India. Presentation to IBC, Financing 

of Water & Sewerage Projects, IMB, London. 

Narain, S (2002). Water & Wastewater International, 17 (2), 27-28. 

Global Water Report 185, December 2003, pp 103 

Global Water Report 191, March 2004, p5 

118 


INDONESIA 


INDONESIA 



USD1,420 



Industry 42% 

Services 46% 

Water resources and degradation 

Indonesia has abundant water resources along with rapid urbanisation and a minimal water provision 

and sewerage infrastructure. Water supplies to cities have been affected by catchment degradation, 

conflicts between urban and agricultural use, untreated sewage and the lack of regulation of the 

discharge of industrial effluents. 

Effluent discharge into river systems 

(m t/pa, 1993) Volume BOD 

Industry 900 1,349 

Domestic 1,653 517 

Total 2,533 1866 

While there are significant groundwater resources available for urban areas, there is no reliable data 

as to how compromised these have been by excess abstraction, saline ingress and excreta 

contamination. 

Population 

Total 2007 (million) 217.6 


In urban areas (2007) 50.4% 


Urbanisation by (2050) 79.4% 

Urban water services 

Less than 50% of the population has access to safe water, falling to 30-50% in urban areas. 

Sewerage facilities serve only 5% of the urban population. 30% of urban households had direct 

access to water in 2004. There are 306 PDAMs (municipal water utilities), 60% serving less than 

10,000 customers. Of samples taken in 1990, 40% showed contamination. Average distribution losses 

are 40%. Tariffs typically cover 70% of operating costs. Indonesia had 37% non-revenue water in 

2004. 

The 2009 targets for urban and rural water supply coverage are 66% (from 41% in 2004) and 30% 

(from 8% in 2004), to serve 45.8million and 27.3million people, respectively. Of the total 318 PDAMs 

(water companies) in the country, 44 are considered financially healthy while 164 need financial help. 







Politics and environmental legislation 

Prior to 1992, there was no functional national water policy. The Ministry of Public Works and the 

provincial governments are meant to be responsible for water laws. Two general water related Acts 

have been passed but these are seen as having little practical value. These are the Act of the 

Republic of Indonesia No 4 of 1982, concerning basic provision for the management of the living 

environment, and the Government Regulation of the Republic of Indonesia No 20 of 1990, concerning 

the control of water pollution. 

119 


INDONESIA 


Environmental issues are now covered by Bapedal (Environmental Impact Management Agency), 

which is a non-ministerial government agency, reporting directly to the President. A programme to 

control the pollution of 24 main rivers in 1989 failed because there was no effective monitoring, while 

regulations concerning industrial effluent discharges are non-enforceable. 

The 1995-99 Repilita VI (Sixth Five Year Plan) allocated USD1.38billion to urban and rural water 

provision, with the aim of reducing distribution losses to 25% for large towns/cities and 30% for 

medium and small towns. Water provision is to be improved for 22million people in urban areas, with 

30,000L/sec (946million m³ pa) with 20,000 villages being connected, reaching 16.5million people in 

rural areas. With the exception of projects that have involved the private sector, economic and political 

factors are understood to have militated against these plans. 

In 1999, the anti-corruption law, Law 28/1999, was passed. This law provides the legal basis for the 

anti-corruption commission to require public officials in sensitive positions to declare their assets prior 

to assuming their posts and to agree to have their assets open to an official audit during and after 

their term. The Government has also formed several working groups to draft a presidential decree on 

improved procurement procedures designed to improve the implementation of public projects. 

The Ministry of Settlement and Infrastructure’s water resource bill was passed in March 2004. It seeks 

to operate with water supplies regarded as a commercial good. 

The 2004 New Water Resources Law is designed to improve water provision from its current state 

where 30% of the urban population have tap water, 30% of municipal water entities (PDAMs) do not 

employ an accountant and 70% of them are facing serious debt difficulties. Legislation passed in 2006 

aims to allow PDAMs to restructure their debts and to seek full cost recovery through tariffs. The 

Medium Term Development Plan for 2005-09 aims to develop infrastructure through improved 

operational efficiency and PSP. Progress is held back by local politicians opposing tariff reform and 

using extant PDAM revenues for unrelated projects (ADB, 2007). 

Water requirements 

USD3 billion has been spent on urban water supply projects since 1970, but much of this money has 

been misappropriated. In 2001, water production was 91,000 L/sec. 

Bulk water sales (l/sec) 1990 2010 

Household taps 16,331 99,000 

Public taps 916 4,000 

Non domestic 7,008 83,000 

Total sales 24,255 186,000 

Available supply 52,000 248,000 

Distribution losses 53% 25% 

Indonesia’s proximate water provision needs have been estimated as requiring USD7.8billion, with the 

majority of funding for medium and large cities coming from international agencies (for example the 

IFC and ADB) and the private sector. In the mid 1990s, the Government aimed for 80% of its urban 

population to have piped water at the household level by 2000. Likewise, in 1997, the Government 

stated that it sought to have 85-100% of households connected to suitable sanitation services by 

2003 against 52% in 1996. Neither target has been met. The Government is currently seeking 

USD4billion for current projects. The current rates of sewerage network development would reach the 

85% target in 90 years, at a cost of 3trillion Rupiah. 

Sewage treatment coverage 

City Connections % coverage 

Bandung 90,000 20% 

Cireon 18,800 32% 

Jakarta 2,300 3% 

Medan 7,400 2% 

Surakata 8,000 13% 

Tangerang 9,800 4% 

Yogyakarta 10,100 10% 

120 


INDONESIA 


Source: Indonesia: Overview of Sanitation and Sewerage Experience and Policy Options; EASUR, 

World Bank, 2002. 

Currently, sewerage services access 0.49million people in Jakarta. In total, 0.7million m³ of effluent is 

discharged into the river network per day. Currently, just 3% of the city’s sewage is treated, or a total 

of 210,000 people. Golden Grid (New South Wales and Sydney Water) is seeking to develop a 

25 year BOT. Currently 9% of the population has no facilities and 6% use communal blocks. 

Until the 2001 Water Pollution Control Regulation, wastewater from households was not defined as a 

water pollutant. Subsequently, municipalities have been made responsible for managing it. 

Freshwater 

Total (1998, km 3 ) 2,530.0 

Per capita (1998, m 3 ) 12,251 





Politics and PSP 

Water PSP was at first mooted to pay government debts as well as to alleviate water provision and 

pollution problems. In 1994-95, there was a belief that water and sewerage were not in the end going 

to undertake PSP, but severe flooding in Jakarta during 1996 brought matters to a head. 

Some 27-30 BOT contracts have been under consideration since 1996. In general, these have been 

advancing slowly. Deregulation started to take place in 1994-95, after Government Regulation No. 20 

opened the water sector to private investors. International companies are expected to carry out all 

necessary consulting and fieldwork before any proposals are submitted. To date, six BOT and 

concession awards have been made. The rate of progress has been slowed by political change, but it 

is anticipated that up to 10 more project awards can be expected to be made in the next five years. 

Currently, bulk water projects for Palembang, Bandung, Surabaya, Ujungpandang and Manado are 

being prepared for offer to the private sector. A total investment of USD314million is needed for these 

projects. 

Groundwater 


Per capita (1998, m 3 ) 1,094 

MAJOR CITIES 


Jakarta 13,215,000 16,822,000 Water services PPP (two sectors) 

Bandung 4,126,000 5,338,000 Under consideration for 2003 

Surabaja 2,735,000 3,453,000 Under consideration since 1994 

Medan 2,287,000 2,981,000 Bulk water provision PPP 

Ujung Pandang 1,284,000 1,688,000 N/A 

Palembang 1,733,000 2,270,000 N/A 

Malang 964,000 1,273,000 N/A 

Badar Lampung 915,000 1,595,000 N/A 

Semerang 967,000 1,273,000 Under consideration 

Tegal 933,000 1,233,000 N/A 



Jakarta (East) Privatisation of water provision services Thames Water 

Jakarta (West) Privatisation of water provision services Suez 

Medan 25 year water supply BOT Suez 

Sidoarjo 25 year water supply BOT VE/RWE 

Talang Kepala 20 year water concession Cascal 

Batam Island 25 year water concession Cascal 

121 


INDONESIA 


Indonesia – Local projects 


Jambi PT Noviantana 427,500 25 year water BOOT, 1998 

Serang Timur PT Sarana Tirta Rejeki N/A 25 year water BOT, 1997 

Kota Legenda PT Purta Alvita N/A 25 year water BOT, 1995 

Kaw Industri Hundai PT Aristirta Tarumba N/A 25 year industrial water BOT, 1994 

Cikarang Baru (Kab. PT Graha Buana N/A 25 year water BOT, 1994 

Beksai) 

Cikarang 

Serang Utara PT Sauh Bahtera N/A 25 year water BOO, 1993 

Kemang Patama PT Kemang Patama N/A 25 year water BOT, 1993 

(Kab. Beksai) 

Bali Water Supply 

Project 

PT Tirta Arta Buana 

Mulia 

N/A 

20 year water Greenfield BOT, 

1992 

Source: Castalia (2004) Sector Note on Water Supply and Sanitation for Infrastructure in East Asia 

and the Pacific Flagship, Review by Castalia for the World Bank, ADB and JIBC. 

City Study: Jakarta 

Water and sewerage services are administered by Persuahaan Air Minuum Dki Jakarta (Pam Jaya), 

which in turn awarded 25 year water supply concessions to RWE/Thames (East Jakarta) and Suez 

(West Jakarta) in 1997. The contracts became operational in January 1998. In 1993, the city area’s 

population of 8,350,000 was served by 320,000 connections, with water available for 19 hours per 

day. All connected properties were metered, with distribution losses of 54%. The main water networks 

were constructed in the 1940s. Spending on infrastructure had collapsed in the 1960s as the Suharto 

regime diverted assets away from public spending. In 1993, 30% of the population received water 

supplies directly from Pam Jaya and 16% via public taps. Private wells and vendors supply the rest of 

the population. 

Under the 1997 privatisation plans, connections were set to rise to 70% by 2002, with all supplied by 

2022, with 80% paying for these services. By 2002, the actual connection rate was only 50%. Even 

so, progress has concentrated upon low earning households: 

Household connections 1997 2002 

Total 505,000 610,000 

Low income houses 25,500 59,230 

Because of the effects of Suharto’s downfall and the Asian financial crisis in 1998, agreement on price 

rises has been deferred in exchange for capital spending deferrals. Suez has sought to extend its 

initial investment period from 5 to 10 years. PT PAM Lyonnaise Jaya has repaired 241km of pipes, 

reducing leakage from 65% to 52%, along with 230 miles of new pipes. The aim is to increase the 

customer base by 10% pa from the current level of 2.4million. 

Rates were increased in 1998 by 20%, 35% in 2001, 40% in 2003 and by 30% in 2004. A 

cross-subsidy system continues to be applied. By 2002, there were still approximately 40,000 illegal 

connections, due to water being provided by corrupt staff. Distribution losses had been reduced from 

60% in 1997 to 49% by 2002. In return for the new rate increases, a stricter reporting regime will be 

put into place, along with new leakage reduction targets. 

To date, RWE has invested USD46million in the East Jakarta concession and Suez at least 

USD50million with the West Jakarta concession. However, water delivery in terms of quality and 

quantity appears to have failed to improve in the intended manner. This is partly due to the poor 

quality of water available to the concession companies and in part because of financial constraints 

imposed by inflation since 1997. It is understood that RWE has been losing USD1million a month for 

about two years, due to the delays in the tariff rebasing procedure. 

122 


INDONESIA 





Lyonnaise des Eaux Suez (France) 3,500,000 0 3,500,000 

TWI RWE (Germany) 2,700,000 0 2,700,000 

Generale des Eaux VE (France) 500,000 0 500,000 

Cascal Biwater (UK) 540,000 0 540,000 

Distribution losses in the main cities 

PDAM Location/Province Leakage 

JAYA Jakarta 45% 

Kodya Bandung West Java 45% 

Kodya Semarang Central Java 39% 

Kodya Kediri East Java 26% 

Tirta Marta Yogyakarta 32% 

Halmahera Tengah Maluku 35% 

Tirta Monpase North Aceh 40% 

Tirta Musi Palembang, South Sumatra 37% 

Major urban water authorities 

PDAM Population Connections Population 

covered 

PAM DKI JAYA, Jakarta 9,696,000 610,000 33% 

Kota Surabaya, East Java 2,864,100 256,637 45% 

Kota Bandung, West Java 2,613,292 141,435 28% 

Kota Semarang, Central Java 1,415,400 118,099 42% 

Kota Bogor, West Java 673,880 47,495 36% 

Tirta Marta, DI Yogyakarta 483,862 32,702 34% 

Nota Manado, North Sulawesi 441,900 31,666 36% 

Kodya Denpasar, Bali 390,410 49,208 63% 

Kota Cirebon, West Java 297,397 50,019 85% 

Kota Salatiga, Central Java 144,483 17,995 63% 

Kota Magelang 123,000 18,757 77% 

Kota Pare-Pare, South Sulawesi 115,900 10,926 48% 

Sources: 

ADB (1999). Good governance and anticorruption: the road forward for Indonesia. Asian Development 

Bank, Consultative Group on Indonesia, July 1999. 

ADB – APDF (2007) Asian Water Development Outlook 2007: Country Paper – Indonesia, ADB, 

Manila 

Seshagiri, G.V. (2001). Asia Water, 17 (11) p 6-10. 

‘The riddle of Jakarta’ GWI, September 2004, pp 21-23. 

123 


JAPAN 


JAPAN 



USD38,410 





Legislation and management 

Water management is guided by the 1958 Water Works Act (amended 2001). The Water Pollution 

Control Law passed in 1960 allows for the monitoring of and enforcement of standards relating to the 

discharge and treatment of household and industrial effluents. The Basic Environment Law passed in 

1993, defines government responsibilities and overall aims for environmental protection, which were 

incorporated into the 1994 Basic Environment Plan. This plan sets out a series of targets for water 

and effluent treatment and the expansion and upgrading of Japan’s sewerage and sewage treatment 

network. The Law for the Preservation of Drinking Water Supply Quality in Headwaters was passed in 

1994. The Japanese Environment Agency is mainly concerned with pollution monitoring and carrying 

out research work. In 1995, domestic water tariffs accounted for 90.2% of service provision costs. In 

theory, water services to agriculture are self financing, but the payments do not cover all actual costs, 

with sewerage fees accounting on average for only 60% of costs. 

Water and sewerage services turnover in 2000 was JPY5,600billion (USD45billion), with capital 

spending of JPY6,500billion (USD52billion) making Japan the largest water market in the world. This 

implies that there is a deficit of USD7 billion per annum purely in capital spending terms. An average 

bill of USD360 per capita also implies that there is significant scope for efficiency gains. 

Population 

2007 (million) 127.8 

2020 (million) 126.7 




Water supply entities 

Size of System Number People served 

500,000+ 21 39,720,000 

100,000-500,000 183 37,850,000 

20,000-100,000 613 26,230,000 

5,000-20,000 1,131 11,200,000 

Below 5,000 9,370 6,650,000 

Water supply entity Number 

Public 11,127 

Private (100+ people) 3,784 

Bulk water 110 

In addition, there are 4,760 sewerage and sewage treatment systems, ranging from river basin 

systems to rural schemes. 






N/A 


Sewage treatment development 

Year 1984 1987 1990 1996 

Tertiary 0% 0% 2% 8% 

124 


JAPAN 


Secondary 30% 36% 42% 50% 

Primary 9% 0% 0% 0% 


Nationally, 95.5% of people are connected to piped water supply. The low level of sewerage in Japan 

(54% in 1995) marks the country from the rest of the industrialised world. In the 13 major cities, 96% 

were connected to sewerage, compared with 42% for the rest of Japan. Septic tanks for example, 

remained commonplace in Tokyo until the 1980s. As much of the water and sewerage network has 

been developed since the 1960s, it is generally in good condition. 

1978 1988 1993 

Flush lavatories 46% 66% 76% 

Sewerage 31% 39% 47% 

The 8 th Five Year Plan for Sewerage Construction ran from 1996 to 2000, and aimed to lay the 

foundations for a modern sewerage and sewage treatment infrastructure. 

1995 2000 2010 

Connected to sewerage 54% 66% 90% 

Effluents recycled 27% 35% 60% 

Tertiary treatment 4% 12% 90% 

By 2006, sewerage coverage was 69% with a target of 72% for 2007. Capital spending on sewerage 

in recent years has averaged JPY3,400 billion pa (USD2.7 billion), 60% of sewerage and 30% on 

wastewater treatment works. The water supply extension programme has been budgeted at 

JPY1,900billion. When including industrial effluents, 62% of wastewater was treated in 1995. 

65% of sewerage and sewage treatment capital spending is eligible for central Government subsidies; 

at a rate of 50% for sewerage and 55% for sewage treatment works. 

Sewage system development in 2006 

JPY billion USD billion 

Total project cost 2,283 19.0 

Eligible for subsidy 1,480 12.3 

Subsidies paid 786 6.6 

Sewer charges covered 197.9% of O&M costs in 2004, but this falls to 55.8% after accounting for the 

cost of bond redemptions. Average sewerage charges are less than those for water because of the 

impact of the capex subsidies. 

Charge (2000) JPY per 20 m 3 

Water 3,083 

Sewerage 2,442 

Freshwater 


Per capita 4,344.0m 3 





Environmental and service shortfalls 

Since 1995, Tokyo has been experiencing water shortages both in late summer and during the winter. 

This is due to inadequate water storage and distribution facilities in the region. 

River water quality 1989 1991 1996 

Good-Fair 69% 75% 74% 

125 


JAPAN 


In 1997, bathing and coastal waters were at their lowest quality since the 1970s, with a fall in the 

quality of lakes also noted. Eutrophication in service reservoirs has affected drinking water supplied to 

14million people in recent years. 

Groundwater 







PSP and private sector players 

The traditional resistance towards privatising Japan’s water or sewerage services and its reticence 

towards foreign companies is being eroded by the country’s mounting debt problems and the need to 

make water and sewerage services cover their costs. Another factor has been the lack of impact that 

Japanese companies have, in consequence, made in the privatisation of water and sewerage 

services globally. The only cases where they have been noted are as equity partners in extant 

consortia. For example, Mitsubishi holds 5% of the United Utilities consortium serving eastern Manila 

and is AWG partner for the Beijing No 10 water BOT. Marubeni also has a JV with VE for a variety of 

projects in China and other East Asian economies. Marubeni is Vivendi’s JV partner for the Chengdu 

BOT water supply project in China. Mitsui and Sumitomo both have a 7.5% stake in Thames Water’s 

Izmit project in Turkey. 

While all urban water and sewerage services are in municipal hands, a degree of O&M outsourcing 

for sewage treatment works has been in place since 1953. It is not managed by the private sector in 

the conventional sense, but through a series of one year management outsourcing contracts. The 

sewage treatment O&M market was worth USD4billion pa in 1997, of which USD1billion pa was 

operated by private sector operators. 

Market breakdown for sewage treatment O&M in public and river basin sewage systems 

Municipal operators 38% 

Ebara 10% 

Nihon HELS Industry 21% 

Other private operators 31% 

According to industry sources in Japan, this market is expected to grow by 50% in the medium term. 

Since 1999 three developments have made the rest of the sector more attractive to the private sector. 

In 1999, legislation was passed allowing the use of private finance in water and sewerage projects, 

although to date this has in reality been limited to the use of PFI projects for their design and build 

capabilities. In 2000, legislation was introduced to encourage the consolidation of water and sewerage 

entities to improve their cost effectiveness. This has subsequently evolved to allow one city to operate 

another city’s services. In 2001, guidelines were introduced to encourage multi year O&M contracts at 

sewage treatment works. In consequence, strategic alliances are being developed in anticipation of 

the opening up of the rest of the Japanese market: 

Japan Water 

J-Team 

Hitachi Public Services 

Marubeni Vivendi 

Thames Water Japan 

Nihon HELS/Mitsubishi 

Ebara/Nippon Jogesuiodo Sekki Co 

Hitachi 

Marubeni/Veolia 

RWE/Mitsui 

There is much more private sector involvement in industrial water services than for municipal water 

services. Sumitomo Metal has been operating a 155,000m 3 per day industrial WTP at Wakayama 

since 2002 and in March this year. 

A 5.5 year O&M contract for Geihoku, a town of 3,000 people, is the first medium term PSP contract 

in Japan. Geihoku’s nine water supply systems are now operated by J-Team, a venture between 

Ebara and Nippon Jogesuiodo Sekkei (NJS) a water consultant. In November 2002, Japan Water, a 

50:50 JV between Mitsubishi and Nihon HELS, Japan’s largest sewage treatment operations 

126 


JAPAN 


company, won the first O&M contract for water services for the city of Miyoshi (population 40,000). 

Japan Water will operate the city’s water treatment and distribution infrastructure for 5.5 years. 

In Saitama prefecture to the north of Tokyo, the local government currently supplies 2.5million m 3 per 

day of treated bulk water and some industrial water. Due to budget constraints, the prefecture chose 

to contract out the operation of a new 150,000m 3 per day WTP. Japan’s most comprehensive PSP 

scheme to date is currently under consideration. The city of Wakayama to the south of Osaka has 

commissioned a feasibility study to replace three old plants with a new 92,000m 3 per day facility at a 

cost of JPY24billion (USD205million). In addition, the renewal of a sludge treatment line at the Okubo 

WWTP will be implemented in the form of a 20-year BOT contract. 

In August 2006, Veolia Water gained two three year wastewater treatment management contracts, the 

first in Saitama Prefecture, near Tokyo (52,000m 3 per day), and the second in Hiroshima (247,000m 3 

per day). These contracts cover almost a million people and will generate total of EUR23million. 

These are the first management contracts to be awarded to international players. In April 2007, VE 

gained a three year O&M contract for a 283,000m 3 /day wastewater treatment plant serving 500,000 

people in Chiba, which will generate total revenues of EUR17.8million. 

In July 2007, Veolia Water Japan and J-Power (Japan’s Electric Power Development Co) acquired 

Fresh Water Mike, a water management unit of Mitsui Mining Co. This company, now named Fresh 

Water Service Co provides water services for half of the households in Omuta, Fukuoka Prefecture 

and the neighbouring Arao in Kumamoto Prefecture. 

MAJOR CITIES 


Tokyo 35,197,000 35,494,000 N/A 

Osaka 11,268,000 11,309,000 N/A 

Nagoya 3,179,000 3,202,000 N/A 

Kitakyushu 2,800,000 2,830,000 N/A 

Sapporo 2,508,000 2,539,000 N/A 

Kyoto 1,805,000 1,805,000 N/A 

Hiroshima 2,044,000 2,045,000 Wastewater O&M 

Sendai 2,224,000 2,240,000 N/A 

Sources: 

ADB – APDF (2007) Asian Water Development Outlook 2007: Country Paper – Japan, ADB, Manila 

Ministry of Environment, Web Site. 

Testar, J.T. (2002). Asian Water 18 (5), 7-9. 

Japan edges towards PSP. Global Water Intelligence, July 2002, pp10-13 

PSP in Japan. Global Water Intelligence, September 2003, pp14-15 

127 


KAZAKHSTAN REPUBLIC 





USD3,790 


USD7,780 


Industry 39% 

Services 54% 


Total water resources in an average year are estimated at 100.5km 3 with 46km 3 suitable for use. 

There is an average shortage of 6.6km 3 pa, rising to 18.3km 3 in a drought year. Water use has been 

falling since 1991 (36.91km 3 ) with the move from Soviet-led cotton irrigation projects to a more 

sustainable agricultural policy. In consequence, the 1996 level of usage was 32.72km 3 . In terms of 

seasonal and geographical availability, water remains a severe constraint on development. 

Population 






Water pollution 

Effluent discharges of polluted water into rivers fell from 0.34km 3 pa in 1991 to 0.23-0.24km 3 in 

1993-95. Total wastewater discharges in 1994 were 6.04km 3 , with 5% from domestic sources, 24% 

from agriculture and 71% from industry. Of the 10 main river basins in 1996, one (Ural) was classified 

as extremely polluted (Grade 7), one (Ertys) as highly polluted (Grade 6), one (Satysu) as polluted 

(Grade 5), one (Nura) as rather polluted (Grade 4), three (Syr-Darya, Ili and Karatal) as moderately 

polluted (Grade 3) and three (Shu and Talas) as clean (Grade 2). 

The Aral Sea is arguably the greatest global environmental catastrophe to date. Its problems are 

described in the country entry on Uzbekistan. 

As for groundwater, 15.86km 3 is assessed as suitable for use, including 10.80km 3 of brackish water, 

for industrial use. Groundwater pollution from mineral extraction, industry and petrochemicals is 

widespread. 







Political responses 

The Ministry of Ecology and Natural Resources has drawn up a series of priority projects for 

1998-2000, along with a long-term plan for 1998-2030. Planning is carried out within the National 

Environmental Action Plan for Sustainable Development of the Republic of Kazakhstan (NEAP/SD). 

The Water Code of the Republic of Kazakhstan was introduced in 2003, setting water charging 

schemes and water and effluent treatment standards. The Association of Vodokanals (the 46 water 

utilities) are also regulated by the 2004 Law on Water Supply and Drainage. 

Almaty is having a USD800million upgrade of its water supply system, 70% of which is in poor 

condition. This includes KZT30billion (USD240million) on a 55km ring main due to be completed by 

2010. Urban water tariffs range from KZT20-41/m 3 . Between 2002 and 2006, Central Government 

allocations for water services were KZT36.4billion, with Local Government providing a further 

KZT8.6billion. 

128 




Drinking Water Branch Program spending / budget 

Period KZTbillion USDmillion 

2002-04 33.2 266 

2005 17.7 142 

2006-10 255.3 2,040 

Freshwater 

Total (1998, km 3 ) 75.42 

Per capita (1998, m 3 ) 4,484 





Urban water services 

Per capita water use in urban areas ranges from 25-500L/day (Almaty 251L/day) against a range of 

15-320L/day in rural areas. 18.6% of urban drinking water samples taken in 1994 failed on hygiene 

grounds. 

Water coverage for the five major cities is generally good, ranging between 76% and 100%, with 

24 hour availability where covered. Sewerage coverage ranges from 38% to 98%. Outside Almaty 

(NRW of 10%), non revenue water ranges from 29-35%. O&M costs are broadly met in these cities by 

water revenue charges. 

According to the draft State Programme on Poverty Reduction for 2003-2005, 75% of the population 

is connected to a water network. The use of alternative sources is increasing; between 1997 and 1998 

alone, the percentage of people using decentralized sources increased from 16 to 23%, in part due to 

22% of water pipelines not functioning. Between 1990 and 1997 the proportion of piped water failing 

water quality standards rose from 9% to 26% and approximately 50% of the population drinks water 

that fails salinity and hardness standards. In rural areas about 9% of the population have access to 

piped water. 

Groundwater 


Per capita (1998, m 3 ) 2,133 





Private sector involvement 

Since 1993, the Government has sought to encourage international investment along with 

privatisation proposals. The World Bank (Kazakhstan joined the IFC in 1993) provided 

USD16.5million out of USD20.9million for initiating the long term upgrading of the city of Atyrau’s 

Vodocanal water and sewerage systems in June 1999. Kazakhstan’s environmental legacy and its 

low population density have limited private sector investment to date, except where it is related to the 

petrochemical industry. Both the Asian Development Bank and the European Bank for Reconstruction 

and Development are active in the country, concentrating on financial institutions and the 

petrochemicals industry 

MAJOR CITIES 


Almaty 1,156,000 1,183,000 Partial PSP in some suburbs 

Cascal’s activities in Almaty 

In 1998, Biwater (Cascal) was awarded a five year O&M contract for water and sewerage services in 

the Kaselen suburbs of Almaty. During the first year of the contract, there was major improvement in 

service quality, with water provision going from 4-6 hours per day to a 24 hour service. Billing was 

only introduced once the water provision service was seen to have improved. A 25% collection rate 

129 




has been improved to 90%, partly since the police services became involved in the procedure. The 

contract is now profitable on an operating basis and Cascal has an option to buy the suburb’s water 

company at a nominal price. 

VE enters Almaty and Astana and leaves Almaty 

VE was awarded two contracts in March 2000. (1) A 30 year water management contract for Almaty 

which has yet to start due to contractual problems. (2) A USD40million contract for 51km water 

pipeline and pumping station renovation for the new capital Astana (population 320,000, to grow to 

690,000 by 2020). 


details) 


Kaselen (Almaty) O&M for water management Cascal 

Astana Water management VE 

Japanese aid for Astana 

In 2003, the Japan Bank for International Cooperation signed a loan agreement for JPY21,361billion 

(USD180million) with the government of Kazakhstan to develop Astana’s water supply and sewerage 

systems. 




Cascal Biwater (UK) N/A 0 N/A 

VE VE (France) N/A 0 N/A 

Source: 

ADB – APDF (2007) Asian Water Development Outlook 2007: Country Paper – Kazakhstan, ADB, 

Manila 

130 


MALAYSIA 


MALAYSIA 



USD5,490 



Industry 52% 

Services 40% 

Water and sewerage provision 

(million) 1990 % 2000 % 

Urban 9.17 96% 12.65 99% 

Rural 5.93 67% 7.33 87% 

Total 15.10 80% 22.20 92% 

Leakage 43% 37% 

Sewerage 42% 79% 

In 1994, 5% of the population had secondary treatment and 5% primary treatment, with access to 

some form of sanitation having risen from 70% in 1980 to 94%. During that period, access to potable 

water actually fell from 80% to 78%. This reflects a period of rapid population growth and 

urbanisation, whereby resources were fully committed towards keeping up with developments in 

urban areas, along with the higher relative cost of installing piped water compared with basic 

sanitation measures. 

Population 





In urban agglomerations (2050) 87.9% 

River quality and pollution 

Industrial development and urbanisation, allied with a minimal sewage treatment infrastructure has 

resulted in a dramatic deterioration in river water quality in recent years. In consequence, a number of 

rivers are now unsuitable as sources of drinking water and are affecting further development. 

Quality by river 1987 1996 

Clean 49% 28% 

Polluted 47% 43% 

Very polluted 3% 29% 

By 1998, only 25% of rivers were classed as clean. Domestic sewage accounted for 65% of the BOD 

load, agricultural effluent 27% and industry 8%. Johor is regarded as the state with the most polluted 

rivers, followed by Penang and Pahang. In recent years, data on inland water quality has been 

volatile. Thus an improvement between 1994 and 1995 has been countered by a significant 

deterioration since 1995. It is likely that this is in part accounted for by the assessments being based 

on overall river quality, thus making year-on-year comparisons more volatile. 







Regulatory framework 

Malaysia’s framework legislation is laid out in the Environmental Quality Act, 1974 (127, Amendment 

A953 in 1996), which outlines the Ministry of the Environment’s powers and objectives. Specific 

legislation includes the Waters Act, 1989 (418) and the Sewerage Services Act, 1993 (508). 

131 


MALAYSIA 


Government, planning and PPP 

The traditional role of the Government, via the Public Works Dept. (PWD), is the supply of funding and 

planning of water projects in the states. Individual states are supposed to levy fees which pay for 

basic O&M, with all extra work funded by central government. This used to be in the form of grants, 

now it has been turned into 0% interest loans. Loans are approved by the Federal Government. The 

Government has much experience of working with the private sector for evaluating problems and 

projects, especially in the use of external consultants. Tariff charges are decided by state 

governments. 

The Government thus now regards water and sewerage as a commercial area. Its PSP or 

commercialisation has to be approved through economic planning units. Until 2004, no open bids took 

place and thus came through private sector proposals, with no competitive bidding. This is how Indah 

Water gained its nation-wide sewerage contract. 

In 2005, the Federal Government assumed joint responsibility with the state Governments for the 

overall management of water services in Malaysia. The National Water Services Commission 

(NWSC) Act and Water Services Industry Act (WSIA) were also passed as a framework of legislation 

for the sector based upon corporatising the state held and operated services, along with setting up the 

Water Asset Management Company (WAMCO) as a government agency to hold the Facility License 

under the WSIA and facilitate process of transformation into new water supply industry regime. 

Current treatment capacity of MYR10,730 is adequate for current demand, but needs to be expanded 

to meet future growth, with 62 water resource projects earmarked for 2000-50. Water consumption in 

Malaysia grew by 8% a year between 1981 and 2001 because of population growth, industrialisation 

and urbanisation and is forecast to rise by an estimated 4% a year until 2010. 

Water demand 

MYR 

2000 9,655 

2020 20,338 

2050 31,628 

Malaysia is to spend RM50 billion (USD3.2billion) on upgrading water and sewage services between 

2005 and 2010. At the same time, a systematic approach to the award of PSP contracts is to be 

adopted. This is a response to the ad hoc manner in which previous contracts have been awarded. It 

is unclear how extant contracts would be affected. This means that new contracts such as the 

proposals in Selangor and Sabah are unlikely to be awarded until an independent regulator is 

established and a suitable tendering process is in place. 

Planned capital spending on water only, 2000-50 

Period 

MYRmillion 

2000-10 22,180 

2011-20 15,421 

2021-30 6,921 

2031-40 6,371 

2041-50 1,220 

Total 51,933 

Freshwater 

Total (1998, km³) 456.0 

Per capita (1998, m 3 ) 21,259 





132 


MALAYSIA 


PSP and priorities 

Malaysia prefers full concession awards, wherever possible, allied with long concession periods, with 

20-60 years being usual practice. Regulation is to be agreed upon within the terms of the individual 

contract, with government input with respect to health and environmental matters dealt with on an 

ongoing basis. 

Making water bills commercial remains a sensitive issue, as demonstrated by the political fallout over 

revising sewerage tariffs after PSP. Pressure for PSP in water services at the state government level 

is coming from the need to recover increased costs. Typically, states sell about 35% to 40% of the 

water produced. Metering is common for all household connections, but there have been a number of 

problems with the reading of meters. Low water prices mean that there is little illegal abstraction. 

Water tariffs in Malaysia will be increased from MYR0.50 per m 3 (EUR0.14) in 2002 to MYR1.49 

(EUR0.42) by 2006 and to MYR2.25 (EUR0.62) by 2011. Tariffs are amongst the lowest in South East 

Asia, and cannot cover costs as 8 out of 17 state water providers ran a deficit in 1998. For example, 

the Selangor Government spends MYR1billion (EUR300million) on operational costs and collects 

MYR200million (EUR60million) from consumers. These costs are set to rise in order to cover 

investments in "analytical instruments and monitoring systems" as a result of a stricter standards laid 

down in the Safe Drinking Water Act. 

During the 1970s, 19 master plans were unveiled in order to implement the National Sewerage 

Development Programme. By 1990, only nine of these had even been partly implemented because of 

limited funds. In consequence, the 1993 Sewerage Services Act was passed in accordance with the 

National Privatisation Policy, to mobilise funds and management. 

According to Dr Lim Keng Yaik, the Minister of Energy, Water and Communications, in January 2006 

the Suruhanjaya Perkhidmatan Air Negara (Span / National Water Services Commission, NWSC) will 

explicitly support PSP through creating a suitable regulatory background for investment. All State held 

(through the Water Asset Holding Co) water companies will eventually be corporatised and owned by 

the various state governments, which will then decide whether they want to continue with their 

concession agreements or float their shares on Bursa Malaysia. Current concessions, such as in 

Johor and Selangor, should be for their respective state governments to decide whether they want to 

continue with the concession agreements. The Minister intends to use the model used by 

the Penang Water Supply Corporation, in being listed on Bursa Malaysia. The 

proposed Water Assets Holding Company, will be a business entity owned by the 

Finance Ministry and run as a full-cost-recovery company over a span of 40-50 

years. 

Access to sanitation 1970 1980 1990 

Household sewerage 3% 4% 5% 

Septic tank 17% 22% 37% 

Flush latrine 3% 30% 45% 

Other latrines 59% 26% 6% 

None 18% 16% 6% 

Malaysia’s sewerage is covered by the previously privately operated Indah Water Konsortium (IWK). 

IWK has found that it is much harder to force people to pay for sewerage as part of bills than it is to 

force them to pay for water. It remains usual to have the sewerage component as a top up on the 

water bill. The State Water Authority cannot compel the customer to pay the sewerage component of 

the bill. IWK had debts of MYR700million by 2000. The government took it over for MYR200million. 

133 


MALAYSIA 


Water supply operating expenditure and revenues in 2005 (MYRmillion) 

State Expenditure Revenues Net result 

Kedah 129.0 163.1 +34.1 

Sarawak [1] 36.6 25.4 -11.3 

Labuan 18.0 11.0 -7.0 

Perlis 18.6 12.8 -5.8 

Pahang 149.1 103.8 -45.3 

N Sembilan 114.4 163.5 +49.1 

Sabah 295.3 255.8 -39.4 

Perak 185.5 231.5 +46.0 

Kuching (Sarawak) 61.6 75.6 +14.1 

Sibu (Sarawak) 24.0 24.0 0.0 

Malaka 113.2 115.8 +2.6 

LAKU (Sarawak) 44.7 53.2 +8.5 

SATU (Terengganu) 81.8 80.8 -1.0 

Selangor [2] 1,510.9 1,417.6 -93.3 

Johor 460.7 610.1 +149.3 

Kelantan 42.7 57.6 +14.8 

Pulau Pinang 129.8 163.1 +34.1 

[1] Excluding LAKU, Kuching and Sibu 

[2] Excluding Kuala Lumpur and Putrajaya 

The private sector continues to encounter problems with low tariffs and poor tariff collection. In 2001, 

private sector expenditure was MYR2.76billion while revenue was MYR2.23billion. In 2003, the 

Federal Government announced that it is to take over the management and financing of water supply 

projects from the country’s states, after some states revealed they were having cash flow problems 

relating to their infrastructure work. In Selangor, the state owns private water companies and 

contractors some MYR3.9billion. Only four of Malaysia’s states made profits from the sale of water in 

2001. 

Groundwater 

Total recharge (1998, km³) 71.0 

Per capita (1998, m 3 ) 3,310 

Withdrawals (1993, km³) 0.4 


MAJOR CITIES 


Kuala Lumpur 1,405,000 1,696,000 Bulk water PPP 

Water contract type by state in 2007 

PWD – Division of the Publis Works Department 

WWD – Waterworks Department 

WB – Water Board 

Corp – Corporatised bodies 

PSP – Private sector participation 

134 


MALAYSIA 


State Type Comments 

Kedah PWD One concession for part of the state 

Sarawak PWD N/A 

Labuan PWD N/A 

Perlis PWD N/A 

Pahang WWD N/A 

N Sembilan WWD One O&M contract for part of the state 

Sabah WWD N/A 

Perak WB Two contracts for part of the state 

Kuching (Sarawak) WB N/A 

Sibu (Sarawak) WB N/A 

Malaka Corp One concession for part of the state 

LAKU (Sarawak) Corp N/A 

SATU (Terengganu) Corp N/A 

Selangor PSP Two BOT contracts 

Johor PSP Concession 

Kelantan PSP Concession 

Pulau Pinang PSP Divestiture 

Contracts by type noted in 2007 

Divestiture 

Penang (PBA) 

Full Concession 

Johor (SAJ), 

Kelantan (Air Kelantan) 

BOT, BOOT etc 

Selangor: SSP2 Puncak Niaga, SSP3 SPLASH 

Sabah: JETAMA, TIMATCH, Lahat Datu 

Perak: MUC, Innovest Lyonnaise 

Johore: Equiventures 

Management Contracts 

Puncak Niaga, ABASS, SPLASH, Taliworks, 

Air Utara, Encorp Utilities, Southern Water 



Johor-Barhu BOT contract, water supply Suez 

Kota-Kinabalu BOT contract, water supply Suez 

Perak BOT contract, water supply Suez 

Ipoh, Perak Concession, water supply Intan Utilities/VE 

Selangor Concession, water supply Puncak Niaga/VE 

Malacca Concession, water supply VE 

Johor O&M/Concession, water SAJ Holdings 

Kertih 20 year industrial water outsourcing VE 

Penang BOT, water treatment PBA 

Kedah Concession, water supply Taliworks 

Selangor Concession, water supply SPLASH 

National contracts Industrial effluent treatment Eco Water 

Negeri Sembilan 10 year water distribution Salcon O&M 

City Study: Kuala Lumpur 

Water provision is managed by the Selangor Waterworks Department. The central area of the city has 

a population of 1.145million, all of which are served by a total of 0.675million connections. Metering is 

commonplace. In 1993, the average domestic tariff was USD0.327per m³, compared with a cost of 

water production of USD0.627 per m³. In consequence, cross subsidies come from domestic and 

industrial water users paying more then the economic cost. Water quality is considered to be fair, with 

the treatment capacity in 1993 covering only 39% of water produced for the city. Another problem is 

135 


MALAYSIA 


low water pressure. 25% of the city is currently covered by a sewerage system, with the rest using 

septic tanks. Treatment of effluents is understood to be minimal. 

As a result, there has been a gradual privatisation of water and sewerage services for the city since 

1993. Sewerage has been taken over by Indah Water, which in turn is gradually developing a network 

of sewage treatment works. Bulk water provision comes in part from the privatisation of Selangor’s 

water services to Puncak Niaga and Vivendi. The privatisation of actual water services to the city is 

now actively under consideration. As noted above, billing and commercial versus developmental 

concerns are the main issues that need to be resolved before the formal contract award process takes 

place. 

Conflict Study: Raw water supplies to Singapore 

A series of agreements drawn up between Singapore and Malaysia from 1927 to 1990 set out terms 

for the provision of bulk water from Johor to Singapore until up to 2061. These tariffs have become 

the subject of a dispute initiated by Malaysia. The water infrastructure has been developed by 

Singapore, which is also responsible for its operational costs. Under the 1961 agreement, Malaysia 

supplies Singapore with raw water at MYR0.03 per 1,000 gallons and Singapore in turn supplies 

Malaysia with treated water at MYR0.50 per 1,000 gallons at a rate whereby both tariffs are effectively 

cancelled out. 

Malaysia is currently proposing that from 2011 it will provide Singapore with treated water (from the 

facilities developed by Singapore) at a cost put at MYR0.45-0.60 per 1,000 gallons in 2000-01, rising 

to MYR3.00-8.00 during 2002, before negotiations broke down. The state of Johor aims to become 

self sufficient for treated water by 2004, thereby decoupling the import/export element of the original 

agreement. Singapore is currently reducing its dependence on imported water from Malaysia through 

wastewater reclamation (‘NEWater’) and desalination and is considering proposals to pipe in water 

from Indonesia. 




CGE Utilities VE (France) 600,000 0 600,000 

Ondeo Suez (France) 1,565,000 0 1,565,000 

SAJ Holdings RWE (Germany) 2,600,000 0 2,600,000 

Intan Utilities Intan Utilities (Malaysia)/VE 600,000 0 600,000 

Puncak Niaga PN/Central Plus (Malaysia 7,100,000 0 7,100,000 

Taliworks Tailworks Bhd (Malaysia) 500,000 0 500,000 

PBA Bhd PBA Bhd (Malaysia) 1,450,000 0 1,450,000 

SAJ Ranhill Bhd (Malaysia 3,400,000 0 3,400,000 

Eco Water Eco Water (Malaysia) N/A N/A N/A 

SPLASH KSB (Malaysia) 0 0 0 

Salcon Salcon (Malaysia) 500,000 0 500,000 

Sources: 

Keong, L M (2002). Asia Water, 18 (2), p 8-11. 

Malaysian Water Association: Malaysia Water Industry Guide 2002 

Malaysia’s big moment. GWI, March 2004, pp 19-21 

Companies fear curbs in new bills. GWR 240, April 2006 

MWAMC (2007) Financial Initiatives For Water Industry Reform. Presentation by Malaysia’s Water 

Asset Management Company at Water Malaysia 2007, Kuala Lumpur, May 2007 

136 


MEXICO 


MEXICO 



USD7,870 


USD11,410 




Regulation and national plans 

The National Commission for Water (Conagua) is responsible for developing and enforcing a series of 

five year water plans. The current plan (PROMMA) runs from 2001-2006 and aims to provide potable 

water to 89% of the population with 65% of household wastewater being treated. The Commission for 

Water and Drainage for Metropolitan Areas is responsible for water and sewerage management in 

urban areas. The major laws are the General Law on Environmental Protection (1988 and revised in 

1996), and the National Water Law (1992 and supplemented by the 1994 Regulations for the National 

Water Law). The Ministry for Social Development has imposed taxes for effluent discharges. The 

National Water Law also introduced the concept of tradable water rights. 

The 2001-06 National Water Plan: 

2001 Actual 2002 Actual 2006 Plan 

% connected to piped water 88% 88% 89% 

% connected to sewerage 76% 77% 78% 

Wastewater treated [1] 23% 28% 41% 

Water & pollution permit compliance 7% 26% 100% 

Levies, fees & taxes (MXNmillion) 6,150 6,337 7,094 

[1] The original PNH 2006 wastewater target was 65%. 

Source: PNH 2006, in OECD (2003) OECD Environmental Performance Review: Mexico 

Inland water quality 2000 

Good 5% 

Fair 22% 

Poor 49% 

Bad 24% 

25% of the country’s surface has adequate water supplies, which enjoy 82% of the rainfall. Most of 

the population lives in the arid areas. According to the Environment Minister in 2001, Mexico has 60% 

less water per capita than 50 years ago, 73% of its supply is contaminated and 93% of its rivers are 

polluted. 

Population 

2007 (million) 103.8 

2020 (million) 124.7 




Water provision and public health 

In Mexico City, water connections were 92% (64% indoors) and access to sanitation was 90% with 

68% having access to flush lavatories. By 1995, water and sewerage connections were 98% and 94% 

respectively. 

Urban water and wastewater services 

1991 1995 2000 

Piped water 76% 87% 87% 

Sanitation 75% 67% 73% 

Sewage treatment N/A 25% 24% 

137 


MEXICO 


Under Mexico’s Standard NOM-001-ECOL-1996, all 139 municipalities with more than 50,000 people 

and industrial sites with a BOD5/suspended solids generation of more than 3t/day are meant to have 

appropriate wastewater treatment by 2000. As of 2002, 24% of the population was connected to a 

sewerage system, with 27% of sewage collected being treated at 978 WWTWs, with 11% being 

treated to primary standard and 16% to secondary standard. Meanwhile, 5.4km 3 pa of industrial 

wastewater is generated, with 15% treated (34% primary, 62% secondary & 4% tertiary) at 

1,405 WWTWs, but only 503 operating in compliance with national standards. 

Effluent treatment, 1994-1999 

(m 3 /second) 1994 1998 1999 

Effluent discharge 261 291 320 

Installed cap 42 63 67 

Operating cap 32 41 42 

Effective cap 14 29 N/A 

Effluent treated (%) 12 14 13 

A water treatment programme was started in 320 municipalities in 1991 to reduce the risk of cholera. 

This involved 95% of municipal piped drinking water being chlorinated along with the prohibition of the 

discharge of untreated sewage effluents for market gardening. Only 30% of drinking water is fully 

treated. 225 out of 1,018 regional water treatment plants were in need of repair in 2001. Distribution 

losses are between 40-48%. 







Investments and service plans 

Current income at USD1,503million pa accounts for 42% of required financial resources. Money and 

management are at a premium. One challenge for municipal performance is that authorities typically 

last three years and water managers just two. Thus there is little management or political continuity. In 

addition, high levels of debt and the inability to generate cash for loan repayments meant that just 

21 states and six municipal water works met the Mexico’s Federal loan criteria in 2003. The 

International Monetary Fund is disbursing USD1billion in loans for water and sewerage projects, with 

USD1.4billion being allocated to water and sanitation projects by the Ministry of Cities and total 

Government spending set to be in the region of USD1.66billion, compared with USD800million in 

2003. 

USDmillion 2001-06 2007-12 2013-25 

Capex 11,911 10,131 20,184 

Opex 9,487 10,644 25,562 

Total 21,398 20,775 46,796 

Total – annualised 3,566 3,463 3,900 

Various estimates point towards USD58-89billion being required over a 25 year period to achieve 

universal and sustainable access to water and sanitation. While total spending has been boosted to 

USD2.2billion pa since 2003, it is evident that further investment is needed. 

2000 2025 BAU 2025 SG 

Urban unaccounted for water 44% 44% 24% 

Drinking water service coverage 88% 88% 97% 

Sewerage service coverage 76% 76% 97% 

Wastewater treated 23% 60% 90% 

Investment (MXNbillion pa) 14 16 30 

BAU = Business As Usual Scenario, SG = Sustainable Growth Scenario 

Source: PNH 2006, in OECD (2003) OECD Environmental Performance Review: Mexico 

138 


MEXICO 


Goals for the National Water Commission (2001-2006) 

Measure 2001 2004 2006 Goal 

Population with potable water service 88% 89.4% 89% 

Population with sewerage service 76% 77.4% 78% 

Rural areas with potable water service 69% 71% 71% 

Volume of wastewater treated as % of wastewater collected 25% 31.1% 46% 

Verification of wastewater quality discharges to ensure 10% 96.7% 100% 

compliance with NOM-ECOL-001-1996 

River basin councils functioning autonomously 1 16 25 

Autonomous Technical groundwater committees 4 41 41 

Number of inhabitants protected against floods (1000’s) 364 3,371 1697 

Amount collected for water rights and fines (Million EUR) 478 581 610 

Source: CNA, 2005 

A series of measures to help preserve water supplies has been launched in a move that could help 

Mexico pay its Rio Grande river water debt to the USA under the 1944 treaty. A deal reached by U.S. 

and Mexican Governments earlier in 2003 said the two countries will invest in water conservation 

measures and mandates the modernisation of the water infrastructure, aiming to achieve greater 

efficiency in water use. Mexico also seeks to boost the amount of treated and reused wastewater from 

one-third of output to two-thirds by 2006. 

Other challenges stem from Mexican politics and their several legacies. Since the 2000 elections 

ended 71 years of rule by the Institutional Revolutionary Party, there has been a piecemeal transition 

from a centralised state to one with more local decision making, but without an effective transfer of 

operations. While in constitutional terms, water belongs to the state, this does not allow for the 

economic and environmental opportunity costs involved when water is transferred from one state to 

another or to Mexico City. Meanwhile, up to half of users do not pay for the service, health regulations 

stipulate that at least a minimal supply must be maintained to domestic non-payers. 

Freshwater 

Annual availability (1998) 375.40km³ 


Annual withdrawal (1991) 77.8km³ 

Domestic 17% 

Industrial 5% 


Politics and privatisation 

Mexico has a long tradition of private sector water contracts. Concessions were awarded in Pueble, 

Saltillo and Monterrey in 1855, 1899 and 1904 respectively. In the 1920s there were 20 concessions 

in operation. Since the 1940s, these were taken over by the state. Privatisation in Mexico was revived 

in the wake of the 1992 National Water Law. At the same time, Federal support for water and 

sewerage services in the provinces was eased to encourage the commercialisation of the services. 

After strong progress between 1992 and 1994, economic problems have meant that progress in 

subsequent years has been piecemeal. 

Many of the current generation of privatisation contracts were awarded shortly before the 1994 Peso 

crisis, which caused problems with regards to the quality of earnings in hard currency terms. 

Contracts such as Biwater’s sewage treatment BOT in Puerto Vallarta have suffered from the inability 

of anticipated tariff increases to be imposed. Companies such as Biwater have concentrated on 

working within new financial constraints to deliver high service quality with the longer term in mind. 50 

wastewater treatment BOT contracts were awarded up to the end of 1999. In 2001, twelve were 

operational (with a PE of 6million), while 20 have been cancelled and twelve are under re-negotiation. 

Azurix entered the market in 1999 by buying out private sector stakes in two concessions. Azurix’s 

activities were sold to Suez in 2002. Likewise VE has gradually increased its holding in its Omsa JV 

from 33% in 1993 to 50% by 1998. From 2003, the Government aims to award concessions for 180 

cities with a population over 50,000. This will cover water treatment and provision services, with 49%, 

51% and 100% stakes being available. In reality, five BOT contracts awards were identified in 2003 

139 


MEXICO 


and a further four in the year to date. Even so, a marked increase in local companies bidding for 

contracts points towards healthier conditions than for some time. 

Groundwater 

Annual availability (1998) 

139.0km³ 


Annual withdrawal (1985) 

24.0km³ 

Domestic 13.2% 

Industrial 23.0% 

Agriculture 63.8% 

Privatising sewage treatment 

Private sector involvement is also being sought for wastewater treatment. 16% of Mexico’s sewage 

treatment capacity is handled by the private sector, involving a total investment of USD400million (the 

1999 figures are Government estimates). 

Sewage treatment in Mexico, 1994-99 1994 1995 1996 1997 1998 1999 

Effluent discharge (m 3 /s) 261 272 277 284 291 320 

Installed treatment capacity (m 3 /s) 42 48 51 57 63 67 

Operating treatment capacity-nominal (m 3 /s) 32 41 33 39 41 42 

Operating treatment capacity-adequate (m 3 /s) 14 17 20 25 29 N/A 

Effluent treated (%) 12 15 12 13 14 13 

Treatment operating adequately (%) 33 35 39 44 46 N/A 

Between 2000 and 2005, the level of wastewater treatment in Mexico rose from 23% to 36%. This 

was due to MXN1.4billion (USD1.08billion) in wastewater treatment plants over the period, 38% from 

the federal government and state and 46% from municipal authorities, with the private sector 

providing 16% of the costs. The aim in 2005 was to increase sewage treatment to 42% by 2009. 

Conagua is seeking for all of Mexico’s wastewater to be treated by 2012 through a combination of 

municipal, state and federal funding and management, along with financing from the private sector to 

make up needed amount. 19million m 3 per day of wastewater was discharged in 2007, of which 36% 

was treated. 3.5million m 3 per day of wastewater is collected in Mexico Valley (Mexico City and 18 

surrounding cities in Mexico state), where treatment facilities are severely lacking. To reach full 

treatment over the next six years, the number of treatment plants in the country would need to nearly 

double, adding 1,500 plants to the 1,600 plants currently in operation. 

MAJOR CITIES 


Ciudad Juárez 1,540,000 2,008,000 N/A 

Culiacán 812,000 931,000 N/A 

Guadalajara 3,968,000 4,456,000 N/A 

Leon de los Alta 1,481,000 1,785,000 Sewerage BOT 

Mérida 939,000 1,097,000 N/A 

Mexicali 860,000 1,015,000 N/A 

Mexico City 19,411,000 21,568,000 Four water management contracts awarded 

Monterrey 3,596,000 4,140,000 N/A 

Puebla de Zarago 1,824,000 1,861,000 Water and sewerage PSP 

Querétaro 947,000 1,185,000 N/A 

San Luis Potosi 946,000 1,103,000 N/A 

Tijuana 1,649,000 2,194,000 N/A 

Toluca 1,5457,000 1,770,000 N/A 

Torreon 1,072,000 1,200,000 N/A 

Case study: Siapa 

Guadalajara’s municipal utility Sistema Intermunicipal para los Servicios de Agua Potable y 

Alcantarillado (Siapa) plans to spend USD700million on improving water and wastewater services 

over the next 25 years. This will cover drinking water and wastewater management for the 3million 

people in Guadalajara, Zapopan, Tlaquepaque and Tonala. Water will be brought from Lake Chapala, 

leakage will be reduced and seven WWTPs will be built. Support will come from the Japanese 

140 


MEXICO 


Government and the Inter-American Development Bank. In addition, the municipality’s investment 

grade debt rating will be used to mobilise new debt when cash flow allows. 

Siapa provides drinking water to 93% of the Guadalajara region and wastewater services to 89%. It 

had revenues of MXN1.5billion (USD140million) in 2002 and is profitable, with a steadily improving 

debt profile. Finances have been improved by adopting fixed tariffs to avoid metering abuse and 

charging for wastewater services. Siapa spent USD50million in 2002 implementing a plan to measure 

water leakage in order to control and improve water pressure. 



Aguascalientes 30 year water and sewerage concession Caasa (Omsa) 

Cancun 30 year water and sewerage concession DHC 

Chiuahua 10 year sewage treatment BOT Atlatech (Cygsa) 

Culiacan Sewage treatment facility concession TECSA 

León Sewage treatment work BOT Suez 

Matamoros Industrial effluent treatment BOT Suez 

NE Mexico City 10 year water management contract Industrias del Agua 

NW Mexico City 10 year water management contract Servicos de Agua Potable (Omsa) 

Pemex 4 industrial WWTW plants for Pemex CYDSA 

Puebla Sewage treatment facility concession TECSA 

Puebla Water and sewerage concession Omsa 

Puerto Vallarta 15 year sewage treatment BOT CTAPV 

Saltillo 25 year water and sewerage concession Empresa Paramunicipal 

SE Mexico City 10 year water management contract Tecnologia y Servicos del Agua 

SW Mexico City 10 year water management contract Agua de Mexico 

Torreón Sewage lagoon BOT Suez 

Xalapa Water & sewerage DBFO Mitsui 

Orizaba Water & sewerage DBFO Mitsui 

Morelia Water & sewerage BOT Aquasol 

Pachuca Water & sewerage BOT Aquasol 

San Luis Potosí Wastewater BOT Degremont/Suez 


Company 

Parent company Population served 


CTPAV Cascal (UK/Ned) 0 300,000 300,000 

Industrias del Aguas Suez (France) 2,000,000 0 2,000,000 

DHC Suez (France) 430,000 430,000 430,000 

Suez Suez (France) 0 2,100,000 2,100,000 

Omsa VE (France) 5,980,000 3,450,000 5,980,000 

Agua de Mexico United Utilities (UK) 2,000,000 0 2,000,000 

T y S del Agua (TECSA) Suez (France) 2,800,000 0 2,800,000 

Aguas de Cancun Suez (France) 383,000 383,000 383,000 

CYDSA CYDSA (Mexico) N/A N/A N/A 

Empresa Paramunicipal Agbar (Spain) 650,000 650,000 650,000 

Mitsui Mitsui (Japan) 400,000 500,000 500,000 

Aquasol Aquasol (Mexico) 0 500,000 500,000 

Sources: 

Mexico Water Report (2006) Submission for the 4 th World Water Forum, Mexico City, Mexico 

OECD (2003) OECD Environmental Performance Review: Mexico. OECD, Paris, France. 

World Bank (2002). Private Solutions for Infrastructure In Mexico. Country Framework Report for 

Private Participation in Infrastructure. World Bank and Public-Private Infrastructure Advisory Facility. 

141 


MONGOLIA 


MONGOLIA 

Mongolia is characterised by the extreme contrast between the urbanised areas, which accounted for 

64% of the country’s 2.7million population in 1998 and the rest of the country, where low-density 

nomadic pastoralism remains commonplace. In the central region there are substantial water 

resources, partly in the form of large, fast flowing streams. However, in the desert south, western and 

eastern provinces, the water resources are much scarcer and are generally of poorer quality with 

increasing salts and diminishing water levels in groundwater tables, streams and lakes. In 1999, 70% 

of the urban population had access to improved drinking water and 30% to sewerage. 

Political change brings the prospect of change 

The Communist administration lost the 1996 general election to the Democratic Coalition, ending 

72-years of one party rule. In consequence, Mongolia is seeking to expand its international activities, 

especially with economies other than the former Soviet Union and the People's Republic of China. A 

privatisation programme was started in 1997, which may well embrace urban water and sewerage 

services but there are no significant developments to date. 

Water resource management 

The Ministry of Nature and the Environment is responsible for water resource use, management and 

development strategies. Under the Ministry there is an Agency for Environment Protection, which 

maintains national co-ordination and monitoring of the water resources. The Governor's offices of the 

Aimag and municipalities are responsible for water supply and wastewater treatment. The Mongolian 

Law on Water was enacted in 1995. 

Water resources management, monitoring and controls have failed to maintain water quality and 

supply, and generally have only documented the loss of resource reserves and quality. High rates of 

leakage are usual, while inefficient supply systems generate higher flows that in turn overwhelm 

sewage treatment systems. In addition to the waste of water, this overloads the sewage system and 

more than doubles the electricity requirements for operating the water supply pumps. Agricultural, 

rural, residential and industrial uses of groundwater in Gobi, and western and eastern Mongolia, are 

contributing to low water table levels and increasing salinity levels. There is an urgent need to improve 

water monitoring activities throughout the country. Water quality tests have been conducted in 14% of 

the country's 20,000 bored wells, although a number are currently known to be contaminated. Actions 

to improve the supply and reduce the waste/leakage of water in urban areas include the introduction of 

meters for each apartment block in Ulan Bator (Ulaanbaatar) and a graduated, steeply rising tariff for 

excessive per capita consumption of water. In addition, the World Bank is supporting an emergency 

leak repair programme through a USD39million loan in 1996 and has financed a series of service 

improvements that were completed in 2001, including a new service reservoir for Ulan Bator. The ADB 

organised a USD8.5million aid and loan package in 1997 to provide improved water supply to 125,000 

people living in informal settlements in five provincial capitals. 


In 1996, 20% of domestic and industrial effluents, or 119.2million m 3 were treated in 121 sewage 

treatment works, with 35million m 3 of wastewater discharged into the natural surface water without any 

treatment. There is no recycling of wastewater. In total, some 70% of urban sewage is treated, while 

domestic wastewater in rural areas is mostly discharged into the environment without treatment. The 

overall sewerage coverage is about 25%. 

In the capital Ulaanbaatar, 90% had access to safe drinking water in urban areas and 74% to 

sanitation in 1995. Identified areas of concern in 1997 included an emergency leakage repair 

programme, allied with water metering on at least the apartment block level. Distribution losses in Ulan 

Bator have been estimated at 60%. 

142 


NEPAL 


NEPAL 


In general, water availability is good, with 8.02% of available resources being abstracted in 1995. 

While coverage in rural areas has improved from 1.58million (11%) in 1980 to 6.95million (38%) in 

1990 and 10.70million (60%) by 1994, continued urbanisation has resulted in a fall in coverage in 

urban areas from 0.71million (80%) in 1980 to 1.20million (75%) in 1990 and 1.33million (64%) by 

1994. There are no recognised sewerage facilities. 

Water management 

Water policy is overseen by the Ministry of Water Resources and the Department of Water Supply and 

Sewerage. Water and sewerage services in urban areas are operated by the Nepal Water Supply and 

Sanitation Corporation (NWSSC). In rural areas, including Kathmandu Valley, water projects are 

carried out at the village level, with financial and technical assistance from the Asian Development 

Bank and various international aid organisations. The NWSSC is regarded as being seriously under 

funded, and is therefore having problems in maintaining its current assets, let alone expanding them. 

Pro Public (an environmental and human rights NGO) has brought a number of cases against the 

NWSSC demanding improved accountability, the elimination of alleged corrupt practices and the 

effective implementation of the 1992 Water Resources Act, which sets standards for drinking water 

quality that to date have not been met. In August 1999, a case at the Supreme Court brought by Pro 

Public, resulted in a ruling demanding that Nepal's Ministry of Environment set national standards for 

sewage and effluent levels in water. This ruling follows an earlier decision commanding the 

Government to ensure that sewage is treated prior to discharge into the two main rivers that flow 

through the Kathmandu Valley. The 1997 Environment Protection Act makes the Government 

responsible for setting acceptable pollution reduction targets. 

The NWSSC operates in the urban areas of the Kathmandu Valley, providing water to 85% of urban 

areas (140,934 connections), but only 20% of urban areas are connected to its sewerage network. 

Total water demand in the valley is estimated at 160 Ml/day and growing at 6% per annum, but water 

production varies between 90-130 Ml/day according to the season. 24 hour supply is understood to be 

the exception, alongside distribution losses of 30-40% and a bill collection rate of 70%. The 

USD464million Melamchi Water Supply Project is intended to augment supplies by 0.27million m 3 per 

day by 2009 but has been delayed by the Maoist insurgency in the Melamchi River area. 

PSP in the Kathmandu Valley 

Since 1997, the World Bank has been encouraging the Government of Nepal to consider proposals for 

the award of a ten year management lease contract for water and sewerage services for the 

Kathmandu Valley. The award process was revived during 2001 alongside two acts designed to 

enable PSP to take place. The Drinking Water Supply Act and the Drinking Water Monitoring and 

Tariff Fixation Commission Act were passed in 2002. 

In 2003, the Asian Development Bank (ADB) gave a USD1.4million technical assistance grant to 

support water and sanitation sector reform in the Kathmandu Valley, including the establishment of the 

National Water Supply Regulatory Board (NWSRB) and the Kathmandu Valley Water Authority, and a 

private sector participation scheme, this time based on an O&M contract. Japan has also provided a 

grant of JPY927million (USD7.57million) for improvements to the water supply system in the 

Kathmandu Valley. A six year, extendible O&M contract, linked to USD100million in capital spending 

and USD15million in loans from the ADB was prepared for the end of 2004. Five international 

companies expressed interest in the proposal against one for the 2002 proposal. In September 2005, 

it emerged that Severn Trent Water gained the Kathmandu contract, as the sole bidder after three 

other pre-qualified companies (Gelsenwasser, SAUR and Biwater International) withdrew their bids. 

The project subsequently went on ice again. The project for serving 1.5million people in the 

Kathmandu valley is due to proceed again in 2008, after the Asian Development Bank (ADB) approved 

lower costs from USD464million to USD317.3million. The ADB will provide a loan of USD137million for 

the project, with the Government of Nepal contributing USD90.6million. Again, the PSP status is 

unclear. 

Sources: 

Global Water Intelligence, October 2001, pp 10-11. 

Asian Water, March 2004, pp 10-13. 

143 


NEW ZEALAND 


NEW ZEALAND 



USD27,250 


USD27,220 




Legislation 

The Resource Management Act 1991 emphasises the intrinsic values of ecosystem biodiversity and 

quality as a central component in water management, with the emphasis changing from multiple-use 

management to environmentally sustainable management. The Ministries of Health and the 

Environment produce water quality guidelines and standards, with the former responsible for 

monitoring drinking water supplies. The Sustainable Land Management Strategy, adopted by the 

Government in 1996 has concentrated on agricultural impacts on water quality. The allocation of water 

and groundwater management systems is the current area of government concern. 

Population 

2007 (million) 4.1 

2020 (million) 4.4 




Inland water quality 

The Pupu Springs on the South Island have been described as possibly the clearest freshwater in the 

world. Their vertical clarity has been surpassed only at a few sites in Antarctic sea waters. 

Good 40% 

Fair/Poor 40% 

Bad 20% 

10-40% of New Zealand’s lakes suffer from some degree of eutrophication. More than 90% of the 

eutrophic lakes are in the North Island and these are usually linked to agricultural run-offs. 

Water Resources and Water Rights 

According to the New Zealand Business Council for Sustainable Development, a significant proportion 

of the water rights as currently allocated will be fully used by 2012. However, between 

20% and 80% of water already allocated for commercial use is not being used at any one time, having 

been allocated on a first-come, first-served basis. In the decade to 2007, 6% of water rights were 

transferred, reflecting the difficulties of transferring water entitlements under the 1991 

Resource Management Act. Allowing 12-22% of water rights to more easily be 

transferred where they can be more effectively used would generate NZD180-330 million pa. 

Source: Aqualinc Research Ltd (2008) Sustainable Freshwater Management – Towards an Improved 

New Zealand Approach, Prepared for the New Zealand Business Council for Sustainable 

Development, August 2008 


There are 1,638 community drinking water supplies, serving 85% of the population. Of these, 7% 

(serving 54% of the population) are considered safe, while a further 2% (serving 5% of the population) 

are of borderline safety. However, 19% (serving 18% of the population) have an unsatisfactorily high 

risk of contamination. The remaining 71% of water supplies (serving 8% of the population) have not 

been graded because they are in communities of less than 500 people. Approximately 15% of the 

population are not connected to community supplies. 

Until the mid 1990s, demand for water was increasing steadily throughout New Zealand. From 1970 to 

1990 the amount used by people in Wellington and Auckland increased by 25% and 32% respectively. 

144 


NEW ZEALAND 


Since the Auckland water crisis of 1993, and the adoption of water conservation strategies, Auckland’s 

water use has reverted to early 1980s levels or around 300L per day, 21% down on the 1988 figure of 

380L per day. 







Development of sewerage services 

In 1950, New Zealand had five sewage treatment plants. By 1997 there were 220, with 80% of 

households connected to them. Surveys in 1976 and 1981 showed that just over 60% of the 

population were connected to sewerage treatment plants. Around 17% of the population had their 

sewage discharged untreated, mostly into the sea, and around 20% were not connected to a 

sewerage system at all, but relied on septic tanks. In the intervening decade, the percentage 

connected to treatment plants is believed to have risen to about 80%, while those discharging 

untreated sewage are less than 5%. Some 15–20% of people probably still use septic tanks. 

Freshwater 

Annual availability (1998) 

327.0km³ 






Spending needs and infrastructure performance 

While the municipal water and wastewater systems are regarded as being fairly comprehensive, much 

of the infrastructure is in need of replacement or rehabilitation (for example, urban non-revenue water 

was 16% in 2003) and wastewater treatment facilities need to be upgraded to secondary standard, 

along with developing a suitable storm water management system. In 2003, 9% of urban water quality 

was seen as unsatisfactory by the Ministry of Health and 3% was of marginal quality. 

In addition, water demand is expected to rise by 20% between 2001 and 2021, along with wastewater 

generation increasing by 21.5%. (Source: PWC (2004) Ministry of Economic Development, 

Infrastructure Stocktake, PWC, New Zealand). The government believes that the water and 

wastewater systems need NZD5billion to be modernised in the medium term. Watercare, the Adelaide 

utility that serves 32% of New Zealand’s urban population for water and 24% for wastewater, 

publishes an annual Asset Management Plan covering current capital spending and forecast capital 

spending for the next two decades: 

Water and wastewater capex costs, 2005–2026 (NZDm) 

2005 2006-16 2016-26 2006-26 

Water supply 42 170 215 486 

Wastewater 27 698 578 1,276 

Total 69 868 793 1,762 

Sources: Watercare Services Limited, AMP 2006/07, 2005; Watercare Services Limited (2005) Annual 

Report for 2005 

Groundwater 



MAJOR CITIES 


Auckland 1,148,000 1,240,000 Partial sewerage PPP 

145 


NEW ZEALAND 


Privatisation & PPP 

New Zealand has to date adopted a somewhat ad hoc approach to privatisation and PPP. Two 

project-related contracts have been awarded, but the Government has stated that it is currently 

against privatising services for a city as a whole. It is likely that in the medium term, any further 

privatisations will be linked to sewerage expansion and upgrading schemes. 


details) 


Pakapura District Water and sewerage concession United Water 

Ruapehu Water and sewerage BOT United Water 

Thames-Coromandel Water and sewerage BOT United Water 

Wellington Sewage treatment DBO United Water 




United Water VE (France) 81,000 251,000 251,000 

146 


PAKISTAN 


PAKISTAN 



USD770 


USD2,500 


Industry 27% 

Services 53% 

PSP and politics 

The Government was elected in February 1997 on a mandate for encouraging the PSP of various 

utilities and industries under the auspices of the PSP Commission. The PSP programme was 

temporarily halted with the suspension of foreign aid and finance to Pakistan in May 1998 following the 

resumption of nuclear testing by Pakistan and India. IMF and ADB lending to Pakistan was resumed in 

January 1999. However, the IMF is concerned about the financial difficulties of the Water and Power 

Development Authority, where it believes that the Government needs to finalise restructuring plans 

and restart its PSP programme once economic conditions allow. 

In 2003, the United Nations (UN) recommended that water needs to be priced to reflect its cost in 

Pakistan and to end agricultural cross subsidies. The UN said 56% of the population had access to 

safe drinking water and 24% had adequate sanitation. Some degree of private sector participation was 

called for, but no further details were given. The Pakistan government approved six water 

development projects worth USD1.7billion (EUR1.5billion) in September 2003. 

Population 



Urbanisation in (2007) 35.7% 

Urban by (2020) 42.8% 


The environment and politics 

In September 2003, General Musharraf called for Pakistan’s four provinces to develop an integrated 

plan for using water from the Indus, which flows through Sindh, the North West Frontier and Punjab, 

and to agree on the construction of at least two major dams on the river. This may have significant 

repercussions with India, which also uses the river. One site at Kalabagh is under consideration, while 

a feasibility study for a reservoir at Bhasha in the northern region would be completed in 2004. 

A National Conservation Strategy was set out in 1992, with a ten year investment plan. The plan has 

been found to be poorly defined and probably over-ambitious in terms of affordability and its ease of 

enforcement and monitoring. The 1983 Environmental Protection Ordinance is currently under 

revision. 

The federal Environmental Protection Agency (EPA) is seen as weak in comparison with Government 

departments that are seen to oppose environmental and public health related measures. The EPA in 

particular is lacking suitable monitoring and enforcement powers. 

In 1998, an Environmental Protection Council was set up, but it does not include members of the 

provincial environmental protection agencies and thus has little concrete effect with regards to 

influencing Government policy. This is demonstrated by the fact that the Government’s 1988-2003 

Perspective Plan did not include environmental or public health concerns. 







147 


PAKISTAN 


Environment and public health issues 

In Baluchistan province, the groundwater table is decreasing by 2-3 metres every year as a result of a 

prolonged 3 year drought and wasteful irrigation methods. In Sindh province, the Council of Karachi's 

Industrial Associations (CKIA) estimates that industries are losing production worth PKR100million 

(EUR2.1million) daily due to the shortage of water. In 2002, 45% of the rural population had access to 

clean water. In 1987, 51% of the urban population and 6% of the rural population had access to 

sanitation. In 2002, 38% of the population as a whole had access to piped water, but there are 

considerable reservations about its quality. 60% of infant mortality is understood to occur because of 

waterborne diseases. 

City Rawalpindi Karachi Lahore 

Population 1,500,000 15,000,000 5,500,000 

Coverage – water 85% 82% 88% 

Coverage – sewerage 35% 60% 84% 

Hours of supply per day 11-15 1-10 16-23 

Non revenue water 30% 30% 42% 

Billing collection efficiency 64% 25% 77% 

Data on environmental degradation is thin. The World Bank believes that industrial effluent pollution 

loading increased 6-10 times between 1963 and 1988 at a time when GDP increased threefold. In 

1992 there were three sewage treatment works in Pakistan, two of which were understood to be 

operating intermittently. 36% of groundwater resources are considered highly saline. 

Freshwater 

Total (1998, km3) 248.0 

Per capita (1998, m 3 ) 1,678 

Withdrawals (1991, km3) 155.6 




Pakistan is moving towards market based approaches for abating water pollution and optimising water 

availability. Groundwater is free while water provision to industry and agriculture is subsidised. 

Plans and priorities 

The 2005 National Environmental Policy is based on the Water Sector Strategy that aims to see the 

sustainable management of water resources in Pakistan by 2025 through universal water provision 

and 80% sewerage coverage in urban areas along with all urban areas having access to treated water 

from 2015. 

40% of water supplied to Lahore does not undergo treatment and 60% of effluents in the city receive 

no form of treatment. Non revenue water in Islamabad currently runs at 60%. In Karachi, wastewater 

connection rates are below 60% and of this, less than 30% receives any form of treatment. The 

sewerage system in Karachi has had little investment since 1965, but under the Karachi Master Plan 

2020 the city seeks to have a 90% sewerage connection by 2020, with 100% of wastewater effluents 

treated. 

The Pakistan Water Sector Strategy anticipates total spending of USD8billion between 2003 and 

2011. 0.1% of GNP was spent on sanitation in 2004-05. It is anticipated that the private sector 

spending share will be 50% of the total sum outlined below. 

148 


PAKISTAN 


PKR billion 

Public sector environment projects 

2000-05 7 

2005-10 28 

Clean Drinking Water for All 

2005-08 10 

2006-07 4 

Other spending 

Total allocation 120 

2004-05 spend 7 

2006-07 budget 9 

Groundwater 


Per capita (1998, m 3 ) 372 



The private sector and water services 

The move towards a legal system based upon Shariah Law poses certain problems with regards to 

commercialising water provision, but this needs to be set against the condition of Pakistan’s service 

infrastructure and the need to upgrade it. In addition, there have been recent calls by a number of 

Islamic scholars to recognise that the provision of water carries a monetary value. To date, the only 

formal PSP proposals have been for Karachi’s water and sewerage services. 

Companies seen 

Seven firms pre-qualified in February 1998 to submit tenders for the proposed privatisation of the 

Karachi Water and Sewerage Company: Anglian Water International (AWG), Biwater International 

(Biwater), Hyder, Thames Water, International Water (United Utilities), Générale des Eaux (VE) and 

Suez. Biwater has been awarded one USD14million construction contract to increase and improve 

potable water supplies to Karachi, including two water treatment works and a pumping station serving 

30% of the city. 

MAJOR CITIES 


Karachi 11,608,000 15,155,000 PPP proposals stalled 

Lahore 6,289,000 8,271,000 PPP under consideration 

Faisalabad 2,494,000 3,326,000 N/A 

Peshawar 1,240,000 1,669,000 N/A 

Gujranwala 1,440,000 1,937,000 N/A 

Rawalpindi 1,770,000 2,371,000 N/A 

Multan 1,452,000 1,944,000 N/A 

Hyderabad 1,392,000 1,864,000 N/A 

Islamabad 1,068,000 1,854,000 N/A 

In 2006 Veolia Water gained a design-build contract to develop sewage treatment facilities for the 

Capital Development Authority of Islamabad. The EUR25million contract involves rehabilitating the two 

extant facilities and the construction of a new plant and is being supported by the French government. 

The two extant plants have a combined PE of 135,000 and the new facility will have a PE of 200,000. 

Source: 

ADB – APDF (2007) Asian Water Development Outlook 2007: Country Paper – Pakistan, ADB, Manila 

149 


REPUBLIC OF PANAMA 


REPUBLIC OF PANAMA 

In 1999, Biwater was awarded a 30 year BOOT concession for bulk water provision to Laguna Alta for 

350,000 people in Panama City. Aguas de Panama began operating the USD25million Laguna Alta 

bulk drinking water plant in 2003. The 20million gallons per day facility will serve the residents of the 

La Chorrera, Arraijan and Capira areas, west of the Panama Canal. Laguna Alta will supply a 

minimum of 15million gallons per day for the first three years of the 30 year concession, and 20million 

gallons per day for the remaining 27 years. Biwater has built eight water treatment plants in Panama 

since 1982, but this is the first PSP contract in the country. 

Panama City’s water and sewerage services, along with other urban areas in the republic may have a 

PPP in due course. The Inter-American Development Bank is providing a USD45million loan for 

preparing the restructuring of Panama’s water and sewerage services. Instituto de Acueductos y 

Alcantarillados Nacionales (IDAAN) is to be opened to private sector participation for financing and 

management, with 51% of its stock to be held by a strategic private investor for water provision and 

sewerage. The total loan package is for USD65million, with local funding of USD20million. 

This concession will involve serving a population of over 2.7million inhabitants for the next 30 years. 

This will require an investment of USD50million in the first five years and another USD90million over 

the following 25 years. In all, around PAB21,000million will be invested during the total concession 

period. As a counterpart, the annual billing foreseen for the services rendered is approximately 

USD80million (almost PAB12,000million at the current rate of exchange and more than 

PAB300,000million during the entire concession). Although ten companies and consortia expressed 

interest in the concession and six qualified for the formal bidding process in 2000, little subsequent 

progress has been made. 



Laguna Alta 30 year water BOOT Biwater 

Panama revived plans in 2005 to clean up the Panama Bay along with developing Panama City’s 

sewer network. The first phase will involve designing pumping stations, a WWTW and separate 

drainage networks for rainwater and sewage and will focus on the older parts of Panama City, serving 

an area of around 500,000 inhabitants. In 2005, a USD263million plan for sewerage and sewage 

treatment for Panama Bay was drawn up by IDAAN with support from the IADB and the JBIC with 

private funding anticipated. This will cover sewerage (USD52million), bulk wastewater transport 

(USD43million), sewage treatment and disposal (USD156million), systems rehabilitation (USD7million) 

and a storm sewerage system (USD5million). 




Biwater Cascal (UK) 350,000 0 350,000 

150 


PARAGUAY 


PARAGUAY 

Empresa de Servicios Sanitarios del Paraguay (Essap), owned by the Paraguayan Government, is the 

sole provider of piped water and sewerage services in all towns and cities with populations of 4,000 

people or more. Essap supplies a total of 250,000 people, chiefly in Asuncion and the surrounding 

towns. 42% of the population in these towns are connected to piped water, and 35% to the sewerage 

network. In Asuncion, the connection rates are 86% for water and 68% for sewerage. As a result, most 

of water provision is in fact carried out by private vendors. 

Since 1997, the government has been preparing for the PSP of Essap. A national regulatory agency 

was set up to oversee Essap and to see how medium sized firms can support its activities through 

semi-independent sewerage projects. Essap is under consideration for PSP, a project supported by 

the World Bank since 1999. It would need to pay off the company’s USD500million in debts and to 

mobilise finances for its belated service expansion. A standby financing facility provided by the IMF in 

2003 is currently being renegotiated, on the condition that various PSP initiatives, including one 

covering Essap, are developed. While the IMF seeks full PSP in most cases, Essap will be allowed to 

develop a concessional or O&M type contract. The general aim appears to be to attract private 

investment towards Essap by 2008. 

Paraguay's national environmental sanitation service, Senasa, is planning to spend USD26million 

supplying 450 communities with drinking water, sources say. Work recently began and drinking water 

is expected to reach residents in July. The project is a part of Senasa's USD55.7million fourth rural 

water supply and sanitation project land its USD17.1million small-communities drinking water supply 

and sanitation program. The World Bank approved a USD40million loan in 1997 for the former and 

the Inter-american Development Bank approved a USD12million loan in 2001 for the latter. 

151 


PERU 


PERU 



USD2,920 


USD6,080 




Service provision 

In 1990, 49% of urban households were supplied with piped water (38% with inside taps) and 60% 

with sanitation, including 51% with flush lavatories. A survey of 12,314 households in urban areas 

found 75% had piped water and 58% had flush lavatories. The coastal cities of Peru (notably Lima) 

are characterised by increasingly severe water shortages due to low rainfall in their regions. In cities, 

70% of connections have 10 hours of daily supply, and 20% have more than 20 hours. The water 

pressure in 70% of the districts does not meet the recommended standards. In 2004, 82% of urban 

households had their own water supplies. Sewage treatment in urban areas rose from 13% in 1997 to 

22% in 2004. 

Population (2004) 

2007 (million) 27.6 

2020 (million) 34.2 




Regulatory background 

Peru has adopted legislation that supports both the private sector and decentralisation. Under this 

legal framework, the action of the state will be redirected from complete responsibility for water 

allocation and the construction and operation of water development projects to a role of mainly support 

and control, entrusting private users with the responsibility for managing water use. The Water Law of 

1995 also allows for the marketing of water rights. The law has been influenced by the 1981 Chilean 

water law, which seeks to minimise the Government’s role in public interest elements and to rely on 

regulation and market forces. Peru’s Pacific Coast watersheds have been organised into five 

autonomous entities (Privatisation Plans table below). 

Peru's congress passed a new bill amending the 1996 public water utilities (EPSs) management law in 

June 2006 with the aim of improving conditions for investment and to bring water rates up to date. This 

legislation aims to mobilise USD540million in investment in concession projects. Peru's 41 EPSs have 

USD1.62billion in debt, of which a third is to the former national housing fund Fonavi. The measure 

would forgive this public debt for the utilities to redirect this money to investing in infrastructure works. 







Sedepal 

The privatisation of Sedepal, which provides water and sewerage services to 5million out of Lima's 

6.67million people, was intended to be the follow-up to Aguas Argentinas. A 30 year concession 

contract was drawn up, with investment demands being USD600million in the first five years and 

USD1billion in the first ten. In preparation, 406,000 water meters were installed. Since it was first 

formally mooted between 1995 and 1996, it has been bitterly opposed by anti-privatisation elements. 

During 2004, various moves towards a partial flotation of Sedapal were made, along with attempts to 

outlaw private investment in the entity. 

Sedepal started a PEN1.98billion (USD606million) project in late 2006 to expand Lima’s water 

distribution to an additional one million people. This is being supported by a 15.8% tariff increase 

152 


PERU 


proposed by Sunass, the utility’s regulator. The Sedepal concession contract is unlikely to be 

developed before 2007, after a series of delays during 2006. The concession program was initially 

designed to improve Sedapal's commercial operations, reducing costs and facilitating mobilising funds 

for further investment. 

Freshwater 




Domestic 7% 

Industrial 7% 


Services in the main cities 

1991 Piped water Indoors 

Lima 94% 85% 

Arequipa 91% 67% 

Trujillo 78% 69% 

In 1998, piped water in Lima cost USD0.15-0.30 per m 3 against up to USD3.00 per m 3 for water 

supplied by vendors. As a result, while piped water customers use on average six times as much 

water, their bills are lower. 

Water and sewerage coverage in Peru, 2005 

2005 Water Sanitation 

SEDAPAL - Lima 

Large utilities (9) 

Medium utilities (20) 

Small utilities (16) 

Small municipalities (490) 

Urban 

National 

According to SUNASS, Peru’s basic services regulator, USD3.8billion is needed to achieve full water 

and sewerage coverage in urban areas. Peru’s Ministry of Housing and Sanitation in 2005, believes 

that the country needs to spend USD4.05billion to reach its 2015 urban water and wastewater 

treatment goals for 2015. 

Service 2005 coverage 2015 coverage Capex cost 

Water 81% 87% USD1.24billion 

Sewerage 68% 84% USD1.39billion 

Wastewater treatment 22% 100% USD1.13billion 

According to SUNASS, Peru’s basic services regulator, USD3.8billion is needed to achieve full water 

and sewerage coverage in urban areas. Peru’s Ministry of Housing and Sanitation in 2005, believes 

that the country needs to spend USD4.05billion to reach its 2015 water and wastewater treatment 

goals for 2015. 

Service 2005 coverage 2015 coverage Capex cost 

Water 76% 82% USD1.48billion 

Sewerage 57% 77% USD1.46billion 

Wastewater treatment 22% 100% USD1.13billion 

During the 1990s, USD200 to 400million was spent by the Government each year on expanding water 

and sewerage services, but this fell to about USD40-50million pa since 2000. 

Sewerage in the main cities 

1991 Sanitation Flush 

Lima 87% 83% 

Arequipa 70% 66% 

153 


PERU 


Trujillo 74% 56% 

Groundwater 



Annual withdrawal (1973) 2.2 kkm³ 

Domestic 25% 



PSP plans 

Five PSPs have been in preparation since 2000: 

Company 

Connections 

SEDAPAL 1,081,000 

SEDAPAR 147,000 

EPS GRAU 141,000 

SEDALIB 102,000 

EPSEL 96,000 

These PSP proposals to some extent represent a wish list, since the PSP of Sedapal remains 

dependent on political circumstances. In May 2002, there were violent demonstrations in Arequipa 

when the Government went ahead with its auction of the power utilities Egasa and Egesur. 

In 2005 the Peruvian government agreed the first of 45 concessions for water and sewerage contracts. 

The concession award process is now set to start during the second half of 2006 with the aim of 

completion by mid-2007 at the time. Along with Sedepal, the main concession proposals include: 

Main Concessions 

Piura EPS and Paita EPS 

Huancayo EPS 

Water treatment plant in Huachipa 

“Water for all" programme 

(USD) 

130million 

110million 

130million 

170million 

The Ministry of housing, construction and sanitation advised BN Americas (29 th September 2008) that 

USD5billion will be invested in public-private partnerships for developing water and sanitation projects 

during the 2006-11 period, with the aim of providing basic services to the entire population. This 

includes some USD462million being invested in five potable water and wastewater treatment plants 

outside the Lima region by 2011 (BN Americas, 2 nd October 2008). 

MAJOR CITIES 


Lima 7,186,000 8,026,000 N/A 

After submitting the only bid, Brazilian construction firm Odebrecht has won the 20-year concession to 

develop the Olmos water supply and hydroelectric project in Lambayeque department. Odebrecht will 

construct the first stage of the dam as well as the tunnel which will transport water to the irrigated 

areas. The project will take water from the Huancabamba River to generate electricity and help irrigate 

30,000ha in the Olmos area. The Peruvian government is providing roughly half of the money for the 

USD140million project, and Odebrecht will supply the rest. Odebrecht’s concession only covers the 

first stage of the project, but once complete, the project aims to supply 2,050million m 3 pa of water, to 

be able to generate 600 megawatts of electricity and to irrigate more than 150,000ha for agricultural 

production. 

Peruvian-Argentine consortium Latin Aguas Concyssa was awarded the 30 years Emfapa concession 

for Tumbes, Zarumilla and Contraalmirante Villar in October of 2005. In Tumbes, where water supply 

used to be available on average six hours a day, some areas now have 20 hours of water supply a 

day, while other areas with 2-4 hours of supply now have 4-8 hours a day. The consortium has 

increased production at Tumbes’ El Milagro water treatment works by 90%. Emfapa serves 180,000 

urban customers, providing 68% and 32% water and sewerage coverage respectively. 

154 


PERU 


Consorcio Agua Azul, which operates the Cono Norte (Río Chillón) concession saw profits fall by 77% 

in 2005 to PEN2.85million (USD855,000) due to exchange rate losses and high interest costs. Sales 

eased by 0.42% to PEN36.1million and operating profit fell 3.35% to PEN18.5million. Consorcio won a 

27 year BOT concession in 2000 for Río Chillón, which supplies water to Sedapal. The contract may 

be extended to 33 years at the concessionaire's request. 



Cono Norte 27 year water concession Aqua Azul 

Tumbes 30 year water & sewerage concession Latin Aguas Concyssa 

ProInversión, the state investment promotion agency is seeking bidders for a concession covering the 

Sedam Huancayo water utility in central Junín department. Huancayo has some 400,000 people 

serviced by 52,527 potable water connections and 50,722 sewerage connections. The concessionaire 

would have to invest some USD100million over 30 years to maintain and expand potable water and 

sewerage services. 

Four bidders have pre-qualified for the concession of Peru's Piura and Paita basic service utility 

(EPS). Bidders include Argentine-Peruvian consortium Latin Aguas-Concyssa, Concesionario de 

Aguas de Piura (Colombia's Conalvias and Cuba's Técnica Hidráulica), Spanish-French consortium 

Proactiva-Medio Ambiente, and Conhydra-Odinsa, from Colombia. The water utility requires a 

USD130million investment, of which USD70million will be financed by a loan from the Japan Bank for 

International Cooperation. 




Aqua Azul ACEA (Italy) 800,000 0 800,000 

LA Conc Latin Aguas (Argentina) 180,000 80,000 180,000 

Source: 

WSP / Ministry of Housing, Construction and Sanitation (2008) Evaluation of Small-scale Providers 

of Water Supply and Sanitation Services in Peru. World Bank, Lima, Peru 

155 


PHILIPPINES 


PHILIPPINES 



USD1,420 


USD5,980 


Industry 33% 

Services 53% 

Water services 

In 1980, 45% of the population had access to the water supply. In 1987, 63% had access to safe 

water, with 31% via piped water; 86% in Metro Manila, 55% in other urban areas and 62% in rural 

areas. The term ‘safe’ with regards to drinking water is open to debate. Just over 36% of the country's 

river systems were classified as sources of public water supply in 2003 and up to 58% of groundwater 

sampled is bacteriologically contaminated and needs treatment. Approximately 31% of illnesses 

monitored for a five-year period were also caused by water-borne sources. 1,000 out of each 100,000 

people die each year because of diarrhoea, one of the highest known rates in the world. 

Access to services 1980 1987 1993 

Access to safe water 45% 63% 81% 

Access to sanitation 56% 69% 72% 

Sewerage services 

The only major sewers cover 8% of the metro Manila area, (all discharged untreated). Small sewerage 

systems exist in Davao (central area population 850,000), Zamboanga (442,000), Cebu (610,000), 

Cauayan (340,000) and Isabela (district population 1.08million). Sanitation coverage is currently 65% 

rural, 85% urban. In 1980, 56% of the population had access to sewerage or septic tanks. By 1987, 

69% had safe sanitation, 15% unsafe sanitation and 16% none. 52% of BOD discharged was via 

domestic sewage, with 48% from industrial sources. 

1994 2000 

Diarrhoea morbidity 1.0% 0.4% 

% access to sanitation 78.2% 93.0% 

% access to safe water 87.0% 100.0% 

Sewage treatment coverage 

City People served % coverage 

Metro Manila 1,010,000 8% 

Bagulo City 5,300 2% 

Zamboanga City 3,700 1% 

Vigan City 1,360 3% 

Bacolod City 2,020 1% 

Cauayan, Isabela 4,000 2% 

Davao City 1,161 1% 

During the late 1990s and early 2000s, sanitation accounted for 3% of water related spending. 

Spending of PHP158billion will be required if 50% of the urban population is to have adequate 

sanitation services by 2015. 

Population 






156 


PHILIPPINES 


PSP and priorities 

The National Water Crisis Act (Republic Act No. 8041) was passed in June 1995. This recognised the 

Government’s past shortcomings in water provision and is aimed at improving both the extent and 

quality of water provision. Sewerage remains a relatively low priority outside Manila, apart from 

industrial discharges that directly impinge upon drinking water quality. The Act superseded previous 

legislation and the Philippine Water Code (1979), whereby private customers were given the highest 

priority. This formed the basis for the Manila concession award process. PSP is allied with the 

intention of the country becoming a potential regional centre for the environmental services sector. 

The Government has put a higher priority on PSP for bulk water supply and sewerage, along with solid 

and hazardous waste management than for water distribution systems except in areas of greater 

shortages. 

PSP has been spurred by the passing of the National Water Crisis Act and the realisation that 

previous plans have not begun to address public health concerns. The Philippines want ideas for 

technology transfer as well as straightforward projects, seeing themselves as a potential regional 

centre for the environmental services sector. The Philippines are keen to privatise bulk water supply 

and sewerage, along with solid and hazardous waste management. The Government was less keen 

on privatising the actual water distribution system except in areas of greater shortages. A broadly 

based award process for urban sewerage and bulk water provision concessions is now under way, 

although it is developing appreciably more slowly than when first unveiled in 2002. 







Environmental management and laws 

The National Water Resources Council (NWRC) is a semi-autonomous entity under the Department of 

Public Works and Highways (DPWH). The DPWH is responsible for the major water and sewerage 

projects and also for rural services. The Metropolitan Water and Sewerage System (MWSS), serves 

Manila. Major cities have separate service entities, while small towns are managed via a collective 

organisation. The Department of Environment and Natural Resources (DENR) is responsible for 

implementing legislation and carries out environmental management work along with the 

Environmental Management Bureau (EMB). The core items of legislation are: Water Usage and 

Classification (1978) with revised Water Quality Criteria (issued in 1990 DENR Administrative Order 

No. 34). Effluent Regulations 1982 (revised 1990 DENR Administrative Order No. 35). 

The Clean Water Act of 2004 (implemented in 2005) attempts to consolidate what has been a highly 

fragmented set of regulations. The most influential of these was the 1995 Philippine Water Crisis Act, 

which paved the way for the Manila concessions. The 2004 President’s Priority Program on Water 

(P3W) runs from 2004-10 and seeks to improve access to water by 50% with an emphasis on informal 

settlements (ADB, 2007), with an overall water coverage of 92-96% by 2010. However, with the urban 

population growing by 2 million pa urban water coverage has fallen from 95% in 1990 to 87% by 2004. 

Freshwater 

Total (1998, km³) 323.0 

Per capita (1998, m 3 ) 4,476 

Withdrawals (1990, km³ 55.4 




157 


PHILIPPINES 


Groundwater 


Per capita (1998, m 3 ) 2,494 





Water companies noted 

Biwater, United Utilities, VE and Suez are all active in the Philippines. Benpres Holdings of the 

Philippines, George Kent Holdings (Malaysia) and Brown & Root (USA) have all been seeking 

contracts, the former building on its role in the MWSS privatisation. 

In August 1999, Benpres was awarded the first solicited bid outside Manila. This was a PHP70million 

15 year DBO for the Laguna water system serving the town of Magdalena. Benguet Corp gained a 

second contract in 2005, a 25 year management contract with the Baguio Water District, Benguet to 

deliver 50,000m 3 per day to Baguio City in North Luzon. Benguet is using water from its former open 

pit in Antamok, seven kilometres from Baguio City, which acts as a reservoir and will develop and 

operate a dedicated water treatment plant. PHP3billion in funds is being raised for the project. 

Manila Water Company has formed a consortium with Stateland Inc and Vicsal Development Corp to 

develop the bulk water supply in Carmen for supplying water to areas served by Metro Cebu Water 

District. This is a PHP2billion project for supplying an additional 46,000m 3 per day to Metro Cebu from 

the Luyang River in Carmen town in north Cebu province. MCWD currently supplies 153,000m 3 per 

day against a demand of 215,000m 3 per day. 

Philippines – Local projects 


Calapan, Calapan Water 106,000 25 year Concession, started in 1991 

Mindoro Development Co 

Lopez-Jaena Pamatong 25,660 Design, Build, Lease contract started in 2002 

Calamba Pamatong 281,000 Design, Build, Lease contract started in 2002 

Source: Castalia (2004) Sector Note on Water Supply and Sanitation for Infrastructure in East Asia 

and the Pacific Flagship, Review by Castalia for the World Bank, ADB and JIBC. 

MAJOR CITIES 


Metro Manila 10,686,000 12,917,000 MWSS (two zones) 

Davao 1,327,000 1,680,000 Proposals under development 

City PSP study: Manila’s MWSS 

The Metropolitan Water and Sewerage System (MSWW), was founded in 1972. Metro Manila is a 

conurbation in the true sense. The area covers 11.5million people in four cities and 37 municipalities, 

with the population growing at 3% each year. The population of Manila is expected to double by 2025. 

40% of those within the area currently live below the World Bank’s definition of the poverty line. Water 

coverage was 53% in the 1970s, 70% in the 1980s and 80% 1993/94. Water losses of 65% in 1986 

were cut to 58% in 1991 and 56% in 1992. Some of this comes via water theft and illegal connections. 

The MWSS sewage system was built from 1904-11 and designed to cover 500,000 people. 11% of the 

population were connected to sewerage services in 1990 and 16% (828,000 in central Manila and a 

further 56,000 in Makat) in 1993. Sewage goes to a long sea outfall. 

The PSP of MWSS was arranged by the IFC to mobilise USD6billion of investment for upgrading and 

expanding the water distribution system and in the longer term, to install a modern sewerage and 

sewage treatment infrastructure. The MWSS has been split into two zones, each taking over the 

existing assets, with each responsible for improving these and adding new assets. The contracts are 

to be run on a 25 year BOT basis. MWSS remains as a regulatory overseer for the concession holders 

for the life of the contracts. The IFC set the following performance targets: 

158 


PHILIPPINES 


Water distribution 1998 2001 2006 

Coverage 67% 85% 100% 

Water availability 1998 2006 2006 

(Hours/day) 16 24 24 

Sewerage 1998 2023 2023 

Coverage 3% 83% 83% 

The contract awards to Suez (Maynilad Water) and United Utilities (Manila Water) represent the 

largest water and sewerage PSP in Asia to date. Each adopted differing pricing patterns: 

Operator PHP/m 3 USD/m 3 

MWSS (in 1997) 8.78 0.33 

UU/Ayala (eastern) 2.32 0.09 

Suez/Benpres (western) 4.97 0.19 

The subsequent performance of these two contracts is examined in detail in the company entries. 

Following the re-nationalisation of Maynilad Water (Suez continues to hold 16% of the company), 11 

companies and consortia requested the Maynilad Water re-PSP bidding documents and five formally 

submitted bids: DMCI Holdings Inc, & Metro Pacific Investment Corp. (Philippines), Manila Water, 

Marubeni Corp (Japan), Noonday Asset Management Asia Pte. Ltd (Singapore) and Karunakaran 

Ramchand (India). Maynilad Water was sold to the DMCI / Metro Pacific consortium – see the 

company entry on Metro Pacific Investments. 

DMCI Holdings Inc, First Pacific Co. Ltd. (Hong Kong) and Metro Pacific Investment Corp. (First 

Pacific, USA) 

Manila Water Co., Inc. 

Marubeni Corp. (Japan) 

Noonday Asset Management Asia Pte. Ltd (Singapore) 

Karunakaran Ramchand (India) 

MWSS is selling its 83.97% stake in Maynilad Water for at least PHP3billion (USD56million), along 

with the winner providing a USD30million performance bond and the assumption of USD300million in 

Maynilad’s debt. Manila Water has been allowed to bid for Maynilad, in contrast to the 1996 process 

when no consortium was allowed to control more than one concession. 

Manila Water – serving formal and informal communities in Manila 

Metro Manila covers 11.5million people in four cities and 37 municipalities, with the population growing 

at 3% each year and its population is expected to double by 2025. 40% of those within the area 

currently live below the World Bank’s definition of the poverty line. The privatisation of MWSS was 

arranged by the World Bank’s IFC to mobilise USD6billion of investment for upgrading and expanding 

the water distribution system and in the longer term, to install a modern sewerage and sewage 

treatment infrastructure. MWSS was split into two zones, each with a 25 year BOT contract. MWSS 

remains as a regulatory overseer for the concession holders for the life of the contracts. 

The concession for the eastern sector was awarded to the Manila Water Company (MWC) a joint 

venture between Ayala (Philippines) and International Water (originally Bechtel (USA) and United 

Utilities (UK) with Bechtel leaving in 2002) who started their concession in 1998. Since the concession 

started, the number of people served in the zone has increased from 3.5 to 5.0million. By 2022, it is 

estimated that the zone will have 8.5million people. In 2007, the concession was extended for a further 

10 years to 2032. 

Manila Water 1997 2007 

Population 4.6 million 5.3 million 


Access to water supply 58% 99% 

Access to 24 hour supply 26% 99% 

Staff / 1,000 connections 9.8 1.7 

Billed water (MLD) 440 1,040 

Non revenue water 63.0% 23.9% 

All water supply targets set by the IFC have been met or exceeded to date. In March 2005, the 

company was listed on the Philippine Stock Exchange, 41% of the shares held by outside investors, 

159 


PHILIPPINES 


32% by Ayala of the Philippines, 19% by TNCs (United Utilities and Mitsubishi of Japan) and 7% by 

the World Bank’s IFC. 

The Tubig Para Sa Barrangay (TPSB) programme is designed to extend services into the barrangays 

(informal settlements) in the zone. It allows several poor families in depressed areas to share the cost 

of a single MWC water meter. By January 2008, 644 projects had completed, connecting a total of 

1.3million people; 1.02million by the end of 2006 and a further 260,000 during 2007. Between 2008 

and 2012, the company plans to connect a further 1.0million people in Rizal Province to the north of its 

central concession area. At the start of the programme in 1998, there were 39,000 cases of diarrhoea 

in the service area, compared with 22,000 in 2006 and 25,000 in 2006. 

TPSB programme 2000 2002 2004 2006 

Total household connections (‘000) 401 470 556 909 

TPSB connections (‘000) 27 63 123 169 

TPSB served population (‘000) 166 383 740 1,020 

Vended water typically costs PHP100 per m 3 , seven times higher than that charged by Manila Water 

under the scheme. During 2004, a 36% reduction in infant related mortality due to diarrhoea occurred 

due to the improved availability of potable water in the zone. 99.6% of water supplied by Metro Manila 

satisfied potable water standards in 2004 and has seen a 100% compliance rate between 2005 and 

2007. 

Sources: 




Manila Water (2008) Annual Report 2007 

Maynilad Water Services (MWSI) – foreign currency exposure challenges 

Suez’s Maynilad Water Services, Inc. (MWSI) was awarded the western half of the Metro Manila 

(MWSS) water distribution concession in August 1997. MWSI is tasked to transform the operation of a 

119-year old water utility into an efficient and modern water distribution system, aside from setting up 

sanitation and sewerage systems. MWSI is meant to supply potable water 24 hours a day to 

approximately 6million people in the western zone by 2007. 

MWSI had suffered from a foreign exchange crisis. The problems arose when MWSI took on 90% 

(USD800million) of MWSS’ foreign debt, which between 1997 and 2000 doubled in Peso terms from 

PHP20billion to PHP40billion (USD946million) due to the Peso’s weakness. Although MWSI gave 

notice to halt the concession in March 2003, continuing arbitration and associated legal processes 

have meant that it continued to run under the 1997 structure. The November 2003 and April 2004 

agreement would have resulted in a write-off of PHP3.8billion (USD89.8million), PHP3.2billion in 

equity and PHP629million in debt (USD75.7million and USD12.1million respectively) and the loss of 

control in MWSI. 

Water services 1997 2005 

Non-revenue water 60% 69% 


Water production (million L/day) 1,600 2,209 

Water service coverage 63% 85% 

Despite the financial problems, the concession has made some progress. The 194,098 new individual 

household connections include 74,266 in urban poor communities. Maynilad’s high non-revenue water 

rate is in part due to the 1996 bid documents identifying only 2,500km of pipelines in the West Zone, 

when there were in fact 3,700km. 

On April 29, 2005, MWSI and its bank creditors, along with the MWSS executed a Debt Capital and 

Restructuring Agreement. As part of this, MWSS acquired 83.97% of the shares of MWSI, with Suez 

holding the remaining shares. In return, the creditors released it from loan obligations worth a total of 

USD220million. MWSS took over the operations of MWSI in January 2006 and in November 2007 they 

were acquired by a consortium led by DMCI Holdings Inc, and Metro Pacific Investment Corp of the 

Philippines. A partial flotation of Maynilad Water is planned for late 2008. 

160 


PHILIPPINES 


The chief difference between the two concessions had been that Manila Water enjoys a customer 

base underpinned by industrial and commercial customers who were in a position to ride out the 

challenges posed by the currency crisis of 1997-98. In both cases, it is evident that significant work 

has been made in terms of improving network efficiency and service coverage. 



Clark EZ Development of industrial zone services CGE Utilities 

Forto Bonifacio Development of industrial zone services CGE Utilities 

Kailangan 15 year water services management Benguet 

Baguio 25 year bulk water provision Benguet 

Magdalena 15 year DBO for water services Bayan Water 

Manila (east) Privatisation of MWSS Manila Water Company 

Manila (west) Re-privatisation of MWSS In preparation 

Subic Bay Development of services for new town Subic Water 

Carmen Bulk water provision Manila Water Company 

Project proposals 

The government continues to ponder tenders for the PHP3.7billion (USD67million) Laguna Lake bulk 

water supply BOT project intended to supplement Metro Manila’s potable water supply. The scheme 

would supply at least 0.4million m 3 of potable water 24 hours a day to Metro Manila and adjoining 

areas. 


Company 



Subic Water Biwater (UK) 370,000 370,000 370,000 

CGE Utilities VE (France) 10,000 0 10,000 

Bayan Water Services Suez (France) 131,000 0 131,000 

Benguet Benguet (Philippines) 277,000 0 277,000 

Manila Water Co UU (UK) / Ayala (Philippines) 5,200,000 500,000 2,500,000 

Maynilad Water Suez (France) 4,300,000 700,000 4,300,000 

Sources: 


Manila 

ADB (2007) Country Paper: Philippines. Asian Water Development Outlook, ADB, Manila 

Philippines Environment Monitor 2003. The World Bank 

161 


SINGAPORE 


SINGAPORE 


Effectively, all of Singapore's 4.5million people are connected to the water and sewerage system. All 

water and sewerage services are managed by the Public Utilities Board (Water Department). The 

scarcity and cost of water limits average household consumption to 168L per capita per day. 

Distribution losses have fallen from 11% in 1988, to 8% in 1990 to the current level of 6% since 2005. 

Drinking water quality is of a high standard. 

99% of the population is linked to the sewerage network. Singapore has 2,000km of sewers, 122 

pumping stations and six sewage treatment works (with sea outfalls). These sewage treatment works 

handle 90% of sewage effluents, 50% to secondary standard and 40% to primary standard. The 

Ministry of the Environment spent USD2.7billion on sewerage facilities between 1992 and 2003, as 

these facilities are expanded and upgraded to secondary and tertiary standard. 

Three water treatment works are being upgraded between 2002 and 2010 at a total cost of 

USD107million, along with a 60million gallon per day expansion of the main plant at an additional 

USD115million. In addition, USD332million has been spent developing and expanding four storm 

water treatment and reclamation schemes. Water fees for domestic customers relate to water usage 

per month so as to encourage water conservation. In addition, there is a separate sewerage charge. 


Singapore remains broadly dependent on imported water from Malaysia’s Johor state, with 60% of 

water resources piped in this way. The first water agreement with Malaysia expires in 2011 (signed 

with Johor state in 1961) and the second water agreement with Malaysia expires in 2061 (signed with 

Johor state in 1962). Malaysia is seeking to revise the 1961 agreement, which guaranteed water at 

USD0.008 per 1,000 gallons until 2061 to USD1.40 per 1,000 gallons or more, despite being operated 

by Singapore. In response, Singapore aims to reduce its dependence on Malaysia for water through a 

series of desalination plants and wastewater recovery schemes. Singapore believes that it can 

increase its internal share of water resources from 67% to 90% through a series of efficiency and 

recovery measures along with further desalination plants. It aims to be self-sufficient from 2061. From 

2009, all lavatories will have to be dual flush models. 

PUB – operating performance, 2004-06 

2004 2005 2006 

Access to safe drinking water 100% 100% 

100% 

Access to adequate sanitation 100% 100% 100% 

Drinking water compliance 99.92% 99.94% 99.96% 

Unaccounted for water (UFW) 5.0% 5.0% 4.5% 

Potable water sales (000 m 3 per day) 

- Domestic 686 694 702 

- Industrial 517 512 528 

- Total 1,203 1,206 1,230 

Water treated (000 m 3 per day) 1,369 1,352 1,399 

An agreement signed by Singapore and Indonesia in 1991 allows the two countries to jointly develop a 

water transfer system capable 4,546,100m 3 of water per day to supply both Singapore and Indonesia. 

Water would be transferred via two undersea pipelines of 450kilometres between Riau’s Kampar River 

(250km) and Bintan Island and Singapore (200km). It is likely that PSP would be involved, with Darco 

having taken an early interest in these proposals. 

Singapore’s “Water For All” policy is based on “Four National Taps” [1] local catchment, [2] imported 

water, [3] NEWater and [4] desalinated water. 3 reservoirs will be developed in addition to the current 

14 by 2009. In addition, the proportion of water from NEWater is set to rise from 7% in 2006 to 30% by 

2011 through two additional facilities. Domestic water consumption was 158L/day in 2006, down from 

162L/day in 2004 and PUB aims to ease this to 155L/day by 2012. 

162 


SINGAPORE 


PSP of water provision 

In 2002, Singapore’s Hyflux (70%) and Suez Ondeo (30%) gained a 20 year BOT contract to build 

Singapore's first desalination plant that will supply Singapore with 136,000m³ of water per day by 

2005, 10% of Singapore’s anticipated water demand of 1.25-1.36million m³ per day by that time. This 

is equivalent to the water needs of some 350,000 people. Ondeo subsequently sold its stake to Hyflux 

as part of their debt reduction strategy and this stake was sold on to Tamasek Holdings, the 

Government’s private sector investment company. 

Two PSP projects were awarded in 2005-07, covering the fourth and fifth NEWater reclaimed water 

projects: 

The Ulu Pandan facility entered service in 2007, delivering 116,000m 3 of NEWater per day and 

46,000m 3 per day of industrial water. The 20 year DBOO was awarded to Keppel Integrated 

Engineering in 2005. 

The Changi NEWater DBOO attracted six bids, with Sembcorp Utilities offering a first year price of 

SED0.30 per m 3 . The facility will have a 70,000m 3 per day capacity from 2009, rising to 190,000m 3 per 

day from 2010. 



Changi Changi NEWater, 25 year DBOO Sembcorp 

Ulu Pandan Ulu Pandan NEWater, 20 year DBOO Keppel 

Tuas Singspring desalination, 20 year BOT Hyflux 


Company 



Sembcorp Sembcorp (Singapore) 350,000 0 

Keppel Keppel (Singapore) 700,000 0 

Hyflux Hyflux (Singapore) 350,000 0 

Sources 

Ministry of the Environment & Water Resources (2007) Key environmental Statistics 2007, MEWR, 

Singapore 

PUB (2007) PUB Annual Report 2007, PUB, Singapore 

163 


SOUTH KOREA 


SOUTH KOREA 



USD17,690 


USD23,800 


Industry 40% 

Services 57% 

Sewerage and water quality 

River water quality has improved since 1988: between 1994 and 1997, KRW5.6trillion (USD4.6billion) 

was spent on water pollution control, including the construction of 52 sewage treatment works. 

Population 



Urbanisation in (2007) 81.2% 

Urbanisation by (2020) 97% 

Urbanisation by (2050) 96% 

Management 

The Environment Administration (founded 1980) was upgraded to ministerial status as the Ministry of 

Environment in 1990, with specific bureaux for water and sewerage opened in 1994. The Pollution 

Prevention Act (1963, revised 1971) was replaced by the Environmental Preservation Act in 1997, 

which in turn has become the framework for 24 separate Acts between 1990 and 1997, including three 

relating to water quality and sewerage and two for water resources management. The main legislation 

is contained in the Water Quality, Water Supply and Sewer Systems Acts. Green Vision 21 

(1996-2005) is aimed at forming a comprehensive environmental compliance programme for the 

country. Water Vision 2020 (2006-20) seeks to address regional imbalances in water supply and 

demand, primarily through decreasing overall demand by 2.4billion m 3 pa through water management 

efficiency and water reuse. 




With improved sewerage N/A 



Infrastructure plans 

The Comprehensive Measures for Water Management is due to run between 1996 and 2011. A total 

budget of KRW90.9trillion has been allocated (USD75billion) for these projects. This includes 

KRW28.9trillion (USD24billion) for environmental improvements by 2005, including KRW26.9trillion 

(USD23billion) for the construction of 224 sewage treatment works. In addition, 43,786km of new 

sewage pipes are to be laid. 

"Green Vision 21" was a USD68.2billion master-plan for upgrading the country’s industrial and 

municipal environmental management between 1995 and 2005. This was followed in 2003 by a 

USD19billion plan which is to be completed in 2007. The government is expected to announce another 

long-term environmental plan, with a larger budget, that will carry on the initiatives of Green Vision 21 

from 2006 to 2015. Overall spending on water pollution control was some USD6.0billion in 2004 

(including industrial and O&M). Green Vision 21 aims for 95% access to piped water nationally and 

80% sewerage and 80% sewage treatment by 2011, with a higher rate for urban areas. 

164 


SOUTH KOREA 


Development of water sewerage systems 

People served (million) 

System capacity 1000 gallons/day) 

Water Sewerage Water Sewerage 

1995 38.82 24.42 22.91 11.45 

1997 39.61 28.60 23.96 15.04 

1998 40.19 31.10 25.70 16.62 

1999 40.95 32.54 26.59 17.71 

2000 47.93 33.84 26.34 18.40 

The figures below are from the 1997 interim assessment. 

Piped Water Potable Water Sewage Treatment 

1995 (actual) 83% 43% 45% 

2001 (planned) 90% 85% 65% 

2011 (forecast) 95% 90% 80% 

It is understood that a fundamental restructuring of water supply and sewage services will take place 

in 2005, based on the creation of seven full water services public companies: KOWACO (national), 

Seoul, Pusan, Inchon, Daejeon, Daegu, and Gwangju. This aims to enable the Korean water services 

industry create players in the market to compete with companies active in Asia. However, institutional 

settings to support the restructuring are weak, with issues such as water pricing, reduction of water 

leakage, and systematic management of water supply still needing technical as well as institutional 

support. 

Freshwater 

Total (1998, km³) 66.1 

Per capita (1998, m 3 ) 2,887 





PSP prospects 

Private sector involvement and funding in the construction of water treatment facilities was permitted in 

1994. This has been extended to allow BOT contracts, including foreign companies if they work in 

partnership with Korean companies. VE and Suez have gained sewage treatment contracts, VE has 

also gained a comprehensive effluent management contract with Hyundai, its South Korean partner 

company. VE anticipated being involved in the construction of 26 sewage treatment works for a total of 

USD1billion. The two contracts signed to date involve USD344million of capital spending. While water 

treatment plants have yet to be privatised, this remains possible. Water treatment plants built by 

Degremont account for 20% of drinking water in Seoul and 80% of Busan’s. 

Groundwater 





165 


SOUTH KOREA 


MAJOR CITIES 


Seoul 9,645,000 9,545,000 PSP under consideration 

Pusan 3,554000 3,534,000 Sewage treatment PPP 

Inchon 2,620,000 2,712,000 Sewage treatment PPP 

Taegu 2,511,000 2,551,000 PSP under consideration 

Taejon 1,453,000 1,516,000 N/A 

Kwangchu 1,436,000 1,449,000 N/A 

Songnam 955,000 994,000 N/A 

Ulsan 1,056,000 1,097,000 N/A 

P’ohang 790,000 1,275,000 N/A 

Puch’on 745,000 724,000 N/A 

Suwon 1,168,000 1,511,000 N/A 

Ansan 984,000 2,230,000 N/A 

City Study: Seoul 

20million people live in Seoul and the Han River basin, accounting for nearly half of the country’s 

population. Industrial development and population increases resulted in a consistent decline in raw 

water quality for the Seoul between 1990 and 1997. The 1997 Act relating to Water Resource, Water 

Quality Improvement and Local Resident Support in the Han River watershed was implemented to 

improve the quality of water entering the Paldang reservoir and the Han River, which supply 12million 

tonnes of water per day to the city. Wastewater treatment is to be improved from 59% to 82% by 2005 

at a cost of KRW2.7trillion (USD2.3billion), partly financed by a water use charge system that aims to 

raise KRW200billion (USD167million) pa. In addition, the proportion of liquor and telephone taxes that 

are allocated to water and wastewater projects is being raised from 21% in 1997 (equivalent to 

USD500million pa) to 30% by 2003. 



Kumdan 20 year sewage treatment BOT VE/Hyundai (Korea) 

Inchon 20 year sewage treatment BOT VE/Hyundai (Korea) 

Pusan 28 year sewage treatment BOT Suez/Hanwha (Korea) 

Yangju 24 year sewage treatment BOT Suez/Hanwha (Korea) 




Suez Suez (France) 0 900,000 900,000 

VE VE (France) 0 410,000 410,000 

Source: 

MOCT (2007) Water Resources in Korea 2007, MOCT, Seoul 

166 


SRI LANKA 


SRI LANKA 

Management 

In 1980, the National Environment Act (NEA) was passed and the Central Environment Agency (CEA) 

was formed. The CEA was given enforcing powers through an amendment of the NEA in 1988, which 

has been exercised since 1990. The drinking water supply system is managed by the National Water 

Supply and Drainage Board (NWSDB). NWSDB is run on a commercial basis and currently operates 

287 water supply schemes. 

Water investments and plans 

The Government has set a target of total coverage by water supply and sanitation by the year 2010 

through its National Programmes. This was revised to 85% access by 2010 in 2005. Water supply had 

reached 70% coverage by 1994, with sanitation at 50% coverage by the same time. In rural areas 

sanitation projects are implemented by different agencies with donor assistance, while urban areas 

have been somewhat neglected. 3.7million people (21%) live in the urban areas in Sri Lanka, of which 

an estimated half resides in the low income settlements. The infant mortality rate in these areas is 

between 32 to 54 per 1,000 live births, compared to the national average of 19.4%. 

Proposals for new investments average USD61 per capita in the Western Region (including the 

capital, Colombo) which already has the highest existing sewerage coverage of 73%, whereas per 

capita investments in the Southern Region, for example, are proposed at USD8 per capita which 

presently has only a 47% coverage. 

Monthly consumption (m 3 ) Monthly bill (Rs) 

2000 2001 2000 2001 

Greater Colombo 22.40 21.95 199.62 235.17 

Regions 17.70 16.50 133.02 125.67 

Average 19.67 19.15 154.27 178.95 

Revenue collection started in 1982 and since the 1990s, these have been used to encourage water 

conservation. As a result of the progressive billing scheme, per capita daily consumption has 

decreased from 200L per day in 1995 to 140L in 2003 with the medium term of reducing this to 100L. 

Tariff collection rates between 1993 and 2001 have been between 89% and 99%. 

Non revenue water, 2001 NWSDB overall Colombo City 

Leakage 23% 25% 

Free supplies (standpipes) 4% 15% 

Illegal connections 4% 8% 

Metering errors 4% 5% 

Total 35% 53% 

PSP pondered 

The World Bank is seeking to reform the water sector, along with private sector participation, so as to 

achieve the Sri Lankan Government's aim of "safe drinking water for all" by 2010. This would require 

an annual investment of USD200million for 10 years. In 2003, the World Bank provided a 

USD39.8million grant for improving access to drinking water and sanitation for 940 villages in 

war-affected areas of Sri Lanka. Over the past 10 years, the annual allocation has been 

USD100million, of which USD80million had been annually disbursed. 

Private sector involvement and finance ought to be mobilised according to the World Bank, with 

wealthier people, who are connected to the capital Colombo's sewerage system, being made to pay 

the operation and maintenance (O&M) costs of a proposed new system, and not the state. In reality, 

this all-or-nothing approach towards PSP has probably resulted in the postponement of appropriate 

contracts being put into place. Instead of seeking O&M contracts for populations of 50-200,000 

people, full concessions were sought in the Kalutara to Galle Coastal Strip project. As a result, while 

O&M contracts may be used in the medium term, concessions outside Colombo are unlikely before 

2015-20. Currently, Manila Water Company (Ayala Corporation and United Utilities) is considering 

developing a suitable form of contract for 500,000 people in the Kalutara to Galle area, which requires 

some USD218million in investment. In the meantime, NWSDB is considering the potential for 

outsourcing leakage detection and repair services, bill collection, new water connections and fleet 

management. 

167 


SRI LANKA 


The Water Services Reform Bill was introduced in November 2003. However, The Alliance for the 

Protection of Natural Resources and Human Rights challenged it in the Supreme Court, which has 

effectively blocked the Bill, saying that it must be approved by all provincial councils. The main 

opposition party, the People's Alliance (PA), is in power in six of the seven provincial councils currently 

functioning. 

A lower key approach 

The National Water Supply and Drainage Board (NWSDB) is seeking a lower key approach to 

involving the private sector through developing community-based, demand-driven water supplies, 

along with introducing cost recovery to operate and maintain the water distribution systems and finally 

expanding township and urban water supply delivery through public-private partnerships. 

In 2004, 3,500 people living in Halgahakumbura, a tenement garden of Colombo had the management 

responsibility for the operation of their water supplies handed over to Petra Engineering Services Ltd. 

Instead of using a stand pipe for free, they pay for piped water. The private operator buys the bulk 

water from the NWSDB. The project has been a success to date, with strong demand to pay for the 

improved service. The aim is for the NWSDB to replicate what they have called the pro-poor PPP (5P) 

model in some of the other 1,500 tenement gardens in Colombo, which are currently served by free 

water. 

NWSDB 1995 2005 

Connections 323,000 907,622 

Water supplied (million m 3 pa) 275 393 

Revenue billing (SLR million) 1,524 5,839 

Revenue collection (SLR million) 1,447 5,972 

Funding - local (SLR million) 2,042 7,566 

Funding - foreign (SLR million) 1,724 5,082 

The 2005 capital expenditure was LKR12,648million, with the locally funded component accounting for 

some 40% of the total spent. 

The 2002 Water Supply and Sanitation Policy has never been approved and the Government has 

since prepared new draft versions of separate national water and sanitation policies. Due to public 

borrowing constraints, about 50% of the funds needed in the water sector up to 2010 are expected to 

come from the private sector. Various forms of public-private partnership are being invited by the 

Government to operate, maintain and extend water sector systems. 

Over the last few years, the Government has considered implementing two private sector participatory 

contracts to operate WSS services in the town of Negombo, north of Colombo, and along the coastal 

strip from Kalutara to Galle to provide 95% coverage based on private taps and to provide improved 

sanitation. 

Funding requirements for the water sector for 2000-2010 were estimated by NWSDB at LKR85billion. 

Water sector funds available from the Government over that period were estimated to total only 

LKR45billion due to constraints imposed by the capacity for public sector borrowing. To fill the funding 

gap, the private sector has been invited by the Government to invest in water supply in order to 

mobilize long-term multilateral funds designated for the private sector. More recently, the sectoral 

public investment program for the 10-year period from 2006 to 2016 has been estimated at 

LKR135.98billion. 

Sources: 

ADB – APDF (2007) Asian Water Development Outlook 2007: Country Paper – Sri Lanka, ADB, 

Manila 

Mahinda Chintana: Vision for a New Sri Lanka, A Ten Year Horizon Development Framework 2006 – 

2016 

MPF (2006) Discussion Paper, p. 87, Department of National Planning, Ministry of Finance and 

Planning, 2006. 

World Bank (2006) Poverty Dimensions of Water, Sanitation and Hygiene in South West Sri Lanka, 

Water Supply and Sanitation Working Note No. 8, February 2006, World Bank. 

168 


TAIWAN 


TAIWAN 



USD14,059 


USD27,600 


Industry 23% 

Services 69% 

After Japan, Singapore and Hong Kong, Taiwan vies with South Korea as the most developed of the 

Asian economies. It also resembles South Korea in recently unveiling a cautious liberalisation 

programme that intends to encourage international investment in water and sewerage infrastructure 

development and services operation in the medium term. The first BOT infrastructure contracts of any 

kind were awarded in 1997, with the first such contract for bulk water provision being awarded in 2002. 

There are currently no plans for state sales of water concerns. 

Population 

2007 (million) 22.9 

2020 (million) 25.0 

Urbanisation in 2007 81% 

Urbanisation by 2020 

N/A 

Urbanisation by 2050 

N/A 

Organisation and regulation 

The Ministry of the Interior is responsible for sewers, with the Central Government looking after the 

financing. The Taiwan Water Supply Corporation is in charge of overall water supply, while the Taipei 

City Water Supply Department looks after Taipei. The Water Resources Planning Commission reports 

to the Environmental Protection Administration (EPA), which in turn asks the Government for funding 

and advises on spending priorities. Construction is approved on a local basis. The two main items of 

legislation are the Water Pollution Control Act, 1974 (revised in 1991) and the Drinking Water 

Management Act, 1991 (revised in 1997), along with various Regulations on effluent standards passed 

between 1988 and 1997. The monitoring of water availability and its use is of a high quality. This 

reflects the potential constraints that Taiwan’s water resources may impose on economic growth and 

rising consumer expectations. 

Actual regulation was marked by a progressive relaxation of effluent limits in the mid 1990s in order to 

stimulate economic development. Nevertheless, the market for pollution control equipment in the 

country has been growing at 6-7% pa between 1996 and 1999. The EPA carries out end of pipe audits 

of industrial discharges. They have resulted in 11,000 fines between July 1994 and June 1998 for 

violations of effluent discharge limits. 


With improved drinking water N/A 

With household drinking water N/A 

With improved sewerage 

N/A 


With sewage treatment 40% 


3,156m³ per capita pa of water is available, of which, 28% is currently utilised. Water distribution 

losses are estimated at 20%. 20% of the population relies on groundwater as the primary water 

source. 78% of rainfall takes place between May and October. The maximum potential for sustainable 

water abstraction is estimated at 20billion m³ pa, without further infrastructure development. 

Investment in water provision and distribution accounted for 0.87% of GNP from 1953-1992. 

Groundwater supplies between 21% (wet year) and 41% (dry year) of water needs. Groundwater 

shortage in Taipei and the city Kaohsiung affect industrial concerns as almost all the domestic water 

for these cities is obtained from river water. Reservoirs supply 18 – 20% of needs depending on the 

level of rainfall, having a total capacity of 2.1km 3 . 

169 


TAIWAN 


Water demand forecasts 

Water resources, supply and demand (million m 3 ) 

1991 1995 2000 2001 2002 2003 2004 

Surface N/A N/A 5,674 5,488 5,437 5,382 5,543 

water 

Ground N/A N/A 12,146 12,998 13,264 12,219 12,247 

water 

Total 17,675 18,919 17,820 18,486 18,701 17,601 17,790 

Agriculture 13,554 14,546 12,317 13,012 13,410 12,434 12,604 

Domestic 2,493 2,747 3,633 3,734 3,525 3,559 3,532 

Industry 1,628 1,626 1,870 1,740 1,766 1,608 1,654 

Source: Statistic of Water Resources, Water Resources Agency, MEA, Taiwan, 2005 

Total extraction of water was 19.5km 3 pa in 1997, and is forecast to rise to 21.2–23.0km 3 by 2036. 

Domestic water consumption accounted for 2.4km 3 in 1997, and is forecast to rise to 4.2–5.0km 3 by 

2036, while industrial water consumption accounted for 1.7km 3 in 1997, and is forecast to rise to 

2.0-3.0km 3 . Use of water in agriculture is expected to be constant at 15.4km 3 . These forecasts point to 

an excess in demand over currently sustainable resources of 1.2–.2.0km 3 per annum by 2036. While 

distribution losses can be reduced from their current level of 20% to perhaps 15-18%, further 

development of the country’s reservoirs and bulk water supply network looks necessary in the longer 

term. 

Internal renewable resources 

Total (1998, km 3 ) 64.5 

Per capita (1998, m 3 ) 2,972 



Development of water services 

Access to piped water rose from 69.5% in 1981 to 84.2% in 1991. In 1996 water utilities in Taiwan 

provided 8.45million m 3 of drinking water per day to 15.33million people. Domestic usage rose from 

66m 3 per capita per annum in 1977 to 121m 3 per capita per annum in 1995. 

Water quality standards 

Drinking water quality is assessed under Article 11 of the 1997 Drinking Water Management Statues. 

15,000 samples per annum are taken. Until recently, source contamination had caused some 

deterioration in water quality. 

Drinking water quality: 

1991 98.17% pass 

1995 95.72% pass 

2000 98.85% pass 

2002 99.67% pass 

2004 99.52% pass 

2006 99.54% pass 

2007 99.58% pass 

2008 (ytd) 99.47% pass 

Over-abstraction of groundwater has resulted in saltwater ingress, while river quality has declined 

because of uncontrolled discharges. Under the National Environmental Protection Plan, targets are 

97.68% for 2001, 98.34% for 2006 and above 99.00% for 2011. 

170 


TAIWAN 


Effluent treatment 

Year Municipal Industrial Agricultural 

Total 

sewage wastewater effluent 

1994 9.2% 76.3% 43.4% 49.0% 

2000 15.9% 73.2% 64.9% 52.5% 

2005 25.8% 77.2% 71.0% 58.3% 

2006 30.1% 76.9% 79.6% 62.0% 

2007 34.5% 77.3% 63.6% 59.1% 

2001 EP 18.3% 81.0% 49.6% 60.4% 

2006 EP 29.3% 81.8% 51.8% 63.6% 

2011 EP 37.7% 81.8% 53.1% 65.7% 

EP – National EP Plan targets. 

Sewerage infrastructure 

At a national level, 7% of sewage was treated in 1996, all of this being in Taipei. In 2007, this had 

increased to 15.6% nationally; 11.3% to the sewerage network and 6,8% to in-house sewage 

treatment systems. The EPA is aiming for 22.1% connection to sewerage in 2008, with 32% of 

effluents being fully treated. Taipei’s main sewage treatment work offers primary treatment (5% of 

sewage), with the remaining 2% treated by two 20 year old secondary STWs and two small tertiary 

STWs. The EPA has drawn up a three-stage plan for treating up to 70% of the country’s effluent load. 

Phase 1, covering Taipei will result in 17% of sewage being treated. The official target for Phase 2 is 

for 40% of sewage effluents to be treated by 2000. This is currently running some years behind 

schedule, with the 1998 National Environmental Protection Plan aiming for 26% of sewage to be 

treated by 2011 and 7% of effluents treated in 2001. The main period of construction is expected to be 

from 2003 to 2010. The EPA’s long-term (Phase 3) aim of reaching 60-70% sewage treatment is now 

unlikely to be attained until 2015-20. Phase 2 includes covering Kaohsiung and 11 other areas, while 

Phase 3 plans to extend to Taichung (0.84million people). Phase 3 has not yet been formally 

approved and requires financing to be organised. 

Sewage treatment plan 

Phase Cost (TWD) Capacity (m³ / day) 

1 40billion 1.3million 

2 106billion 2.2million 

3 TBA 1.8 – 2.6million 

Improving river water quality 

Since 1998, the Bureau of Water Resources has overseen the development of five water quality 

protection zones. The river basins involved provide water for 14million people. The River Basin and 

Marine Management Plan will cost TWD147.1billion and run from 2001-11. The 1998 National 

Environmental Protection Plan sets river water quality targets until 2011. 

Year 1996 2006 2011 

Unpolluted river waters 62% >68% >70% 

BOD reduction (t/day) 2,336 2,475 2,568 

River water quality 

Year Not polluted Lightly 

polluted 

Moderately 

polluted 

Heavily 

polluted 

1994 63.3% 12.3% 11.1% 13.3% 

2000 63.6% 12.0% 12.3% 12.1% 

2005 64.2% 9.9% 19.7% 6.2% 

2006 65.5% 9.0% 19.5% 6.0% 

2007 61.8% 7.9% 23.6% 6.7% 

2001 EP >65.0% 68.0% 70.0%

TAIWAN 


Industrial effluent discharges fell by 20% from their 1987 levels in 1993 and by 85% by 2005. In 2001, 

35% of rivers were of bad to fair quality. 

Policy implementation 

At present there are no fees for wastewater discharge. Industrial effluent has been charged since 

2002, while there are no current plans to charge domestic customers. 

Groundwater resources 


Per capita (1998, m 3 ) 184 



Private sector opportunities 

The sale of stakes in water and sewerage entities remains some years away. Sewerage is currently 

being considered for privatisation, probably during the next 5-10 years. Water supply is unlikely to be 

privatised for 10-20 years. In the meantime, the first bulk water provision privatisation award was 

made in 2002 to Suez. 

Three BOT projects were under development in 2004: 

Kaohsiung Nantzu 

Kaohsiung Feng Shan 

Taipei County Tamshui 

75,000m3 per day WWTW & sewerage system 

58,500m3 per day WWTW & sewerage system 

700-750,000m3 per day industrial & domestic water treatment 

MAJOR CITIES 


Taipei 2,473,000 2,447,000 PSP probable in the medium to long term 

Kaoshiung 1,506,000 1,620,000 Suez, water treatment 

City study: Taipei 

Water supply and sewerage services in the metropolitan area are run by the Taipei City Water 

Department. All 1,189,095 households were connected to the water supply in 1993. Water use was 

675million m³ pa, with an average daily consumption of 281L per capita. The water tariff operates on a 

sliding scale with an average tariff of USD0.244 per m³ with charges increasing above 10m³ pa, with 

no surcharge for sewerage services. All properties are metered. Distribution losses are estimated at 

24%. Seven water treatment works treat 2.74million m³ per day, Chitan IV being completed in 2001, 

with a capacity of 0.5million m³ per day. A further facility (Chitan V) will be constructed by 2011. 

Sewage effluents total 0.68million m³ per day or 247million m³ pa, 93% of which comes from domestic 

sewage, via 422,379 septic tanks, with the remaining 30% of the city connected to mains sewerage. 

By 2002, 59% of households were connected to mains sewerage. 



Kaoshing 17 year water treatment BOT Ondeo 

Hsin Chu WWTW, with 5 year O&M Darco 

In 2002 the Taiwan Water Supply Corporation awarded Suez and Ecotek (China Steel of Taiwan) a 

contract for the overhaul and operation of a drinking water plant in Kaohsiung. The contract is worth 

EUR200million, of which Ondeo Degrémont’s share is EUR90million, covering equipment overhaul, 

building new facilities and operating the new plant for a period of 15 years. The new facility will 

produce 450,000m 3 of drinking water per day from March 2004. While the city has 1.5million people, 

the facility will also serve a further 1.5million living in outlying towns and suburbs. 




Ondeo Suez (France) 3,000,000 0 3,000,000 

Darco / Leader Darco Water Technology (Singapore) 0 300,000 300,000 

172 


TAIWAN 


Note: The United Nations and the World Bank does not recognise Taiwan’s separate existence (while 

doing so for Hong Kong), so the economic and population data used is not strictly comparable with the 

rest of this publication. ROC Government and EPA statistics have been used (yearbooks and from 

their respective web sites). 

173 


THAILAND 


THAILAND 



USD2,990 


USD9,140 


Industry 46% 

Services 44% 

Government departments and law 

Thailand’s first environmental law, The Enhancement and Conservation of National Environmental 

Quality Act was passed in 1975, creating the National Environment Board (NEB) and the Office of 

National Environment Board (ONEB). This act was amended twice in 1978 and 1979, transferring the 

supervision of the Office to the Ministry of Science, Technology and Energy. These acts had limited 

effect and in 1992 the 'Enhancement and Conservation of National Environmental Quality Act' (NEQA) 

of 1992 (B.E. 2535) was passed. This new law created three environmental organisations: the Office 

of Environmental Policy and Planning (OEPP), the Pollution Control Department (PCD) and the 

Department of Environmental Quality Promotion (DEQP). These three organisations are mandated to 

promote the effective implementation of policies, plans and strategies at both national and local levels 

as well as the enforcement of laws and regulations. In consequence, the Ministry of Science, 

Technology and Energy changed its name to the Ministry of Science, Technology and Environment 

(MOSTE). Water policy is enforced by MOSTE, which includes the Wastewater Management Authority 

and the Department of Environmental Quality Promotion and the Pollution Control Department. 

Population 






Management 

Water is managed through the Metropolitan Waterworks Authority (MWA, for Bangkok) and the 

Provincial Waterworks Authority (PWA, for the rest of Thailand). 

Water services 

2001 Produced Sold (million m 3 /day) Connections (million) 

MWA 1,415 857 1.45 

PWA 704 474 3.0 

USD700million is to be spent linking three rivers in eastern Thailand to provide 504million m 3 of water 

by 2006 and 647million m 3 by 2016, compared with current resources of 300million m 3 a day. In 

addition, the PWA seeks to upgrade 230 water treatment works for THB35billion (USD945million). 

Urban Data 2004 






Water provision and pollution 

The MWA served 4.5million people in Bangkok in 1991, with 79% of the city area covered. In 2001, 

the MWA served 6million people, or 75% of the population within its coverage area. Poor water 

treatment facilities mean that water has to be boiled or filtered before use and 20% of the population 

use bottled water instead. 31% of water is lost due to leakage. The PWA served 3.7million people in 

1991, rising to 10million by 2001. 

174 


THAILAND 


Rural water provision remains a problem, with widespread seasonal scarcity. Water shortages affected 

1,369,437 families, or 6,350,356 people, in 364 districts of 44 provinces in early 1999, according to the 

interior ministry. This compared with shortages affecting 228,664 families or 945,425 people in 

300 districts of 42 provinces in 1998. 

In 1998, the Pollution Control Department found water quality in 33% of major rivers to be polluted, 

while 18% were in good condition. 

Freshwater 

Total (1998, km 3 ) 110.0 

Per capita (1998, m 3 ) 1,845 





PSP plans 

In July 1998, the Government announced that the PWA would launch 12 major water privatisation 

projects for bulk water supply, water treatment and water distribution in 10 provinces in the medium 

term and that further concessions for Bangkok are to be awarded. This project started in mid 1999, 

with the corporatisation of the PWA starting in 2000. Water competition for industrial customers was 

introduced in 2001, with a series of concessions from PWA gained by East Water’s Universal Utilities. 

Groundwater 


Per capita (1998, m 3 ) 314 






East Water (EW) remains the only private sector company entirely devoted to water activities. In 

addition to its current network expansion plans, the company seeks to be involved in the new 

privatisation programme and is concentrating on gaining concessions in Bangkok. In 2000, it acquired 

Electricity Generating Plc’s 70% stake in Egcom Tara, a privately held water supply company. EW 

also has an industrial water JV with VE. Thames Water’s water provision contract to northern Bangkok 

was extended in 1995 to cover additional water management operations. 

MAJOR CITIES 


Bangkok 6,5934,000 7,439,000 Partial PSP 

PSP moves unsteadily forward 

In July 2000, the State Enterprises Policy Committee (SEPC) rejected an application for a direct 

supplies concession for Thames Water and prohibited the Provincial Waterworks Authority (PWA) 

from offering any new private deals until the completion of a World Bank-sponsored review. The SEPC 

ordered the PWA to change its service concessions with Thames into turnkey construction contracts. 

Factories were not linked up to the privatised systems because they continued to use cheaper water 

from artesian wells. The PWA had already been forced to pay a private operator THO118million 

(EUR3.3million) compensation because of the resulting under-utilisation of the available capacity. The 

PWA has introduced a new method of calculating water bills by the end of the year to better reflect 

actual costs. PWA hopes the price increases will reduce the losses incurred from subsidising industrial 

water consumption and pave the way for eventual PSP. The authority also plans a nation-wide 

overhaul of water systems to reduce unaccounted for water levels from the current 35.6% to 25%. 

In 2004, it was announced that the Government was considering an IPO of the MWA which in turn 

would be linked with one or more strategic partners. The PWA will meanwhile be split into four regional 

entities. The PWA privatisation is worth an estimated USD1billion. The MWA will be split into West and 

East Bangkok zones, which generated combined revenues of USD385million in 2002. 

175 


THAILAND 





Egcom Tara East Water (Thailand) N/A 0 N/A 

East Water East Water (Thailand) N/A 0 N/A 

Pathum Thani CH Karnchang (Thailand) 800,000 0 800,000 

Bangkok CH Karnchang (Thailand) 400,000 0 400,000 

VE VE (France) N/A 0 N/A 

Paying for sewerage 

Domestic and business customers were charged for wastewater treatment for the first time in 2003, 

via a service fee. The rate was set by the Drainage and Sewerage Department: THB2 (EUR0.04) per 

m 3 of water for household use, THB4 (EUR0.08) for hospitals, markets, department stores and hotels, 

and THB8 (EUR0.16) for industrial use. Households, state agencies and state enterprises would not 

pay the fee for the first 10m 3 of water each month. The cost per household was estimated at THB60 

(EUR1.23) a month for treatment. The fee will be phased in over three years to minimise this, starting 

with THB1 (EUR0.02) per m 3 for households in the first year. 

Listed water & sewerage service companies (Please see company section for details) 

Company Activities Region 

Eastern Water Water distribution concession Eastern seaboard 

Corporate malpractice concerns 

The USD750million Samut Prakarn wastewater management project has been put on hold due to 

concerns about the lack of transparency. Concern has been raised about the emphasis on post hoc 

effluent treatment rather than concentrating on sources of industrial pollution. At the same time, the 

consultation process failed to meet with the Asian Development Bank’s guidelines for good practice, 

while the operators were unable to demonstrate suitable technical capabilities. 



Bangkok 30 year BOT, water distribution CH Karnchang 

East seaboard Water provision to seven provinces Eastern Water 

Lampang THB800million water supply project Eastern Water/VE 

North Bangkok Water management Thai Tap 

Ratcharburi THB690million water supply project Eastern Water 

Source: 

Brown, S. (2002). Asia Water 18 (3) p 9-13. 

176 


TRINIDAD AND TOBAGO 


TRINIDAD and TOBAGO 

The Trinidad and Tobago Management Contract 

The Water and Sewerage Authority of Trinidad and Tobago (WASA), provides water and sewerage 

services to the island’s 1.27million people. In 1996, piped water was available for less than twelve 

hours a day, distribution losses were about 50% and 1% of the 240,000 customers were metered. The 

sewerage system served only 30% of the population. Until the mid-1980s, the government had not 

raised rates for fifty years and by the end of 1992, it had accumulated losses of USD800million. 

Water coverage 1970 1990 1994 2000 2004 

Access to improved water 93% 92% 98% 88% 91% 

Source: WHO assessments, 1970-2004 

In 1994 the Government decided to adopt a phased PSP strategy for the service. Since developing a 

concession would take too much time in the run up to the 1995 general elections, a two-phase 

strategy was adopted. In the first phase, WASA would contract a private operator to provide a 

management team to meet operational, maintenance, and investment targets and follow an agreed 

business plan over the term of the agreement. A management contract was chosen because of the 

poor quality of operational information available, undeveloped institutional arrangements and the 

potential for slow legislative change. Management contracts were seen to be the most flexible way of 

allowing the authorities to gain hands-on experience of private sector contracts in the sector. During 

the five years of this contract, a concession contract would be developed. 

WASA, service delivery, 2001 

24 hours per day 14% 

5 – 7 days per week 32% 



Less than 2 days per week 13% 

Pipe but no water 4% 

No pipe 6% 

Source: UNDP (2005) Sharing Innovative Experiences, Vol 11, Examples of Successful Experiences 

in Providing Safe Drinking Water 

The contract covering water supply, sewerage and sewage treatment and disposal was awarded in 

1996 to a JV between Severn Trent, WASA and the Government of Trinidad and Tobago. The 

contract allowed for Severn Trent to negotiate a follow-on contract within a specified time limit after 

which it becomes open to all. The process was supported by a USD80million loan from the World 

Bank, designed to assist the development of conditions suitable for private sector participation. 

WASA increased tariffs by 35% for customers receiving water for more than twelve hours a day so as 

to encourage the private sector operator to expand coverage and ensure a reliable service. The tariff 

increase was introduced in 1995. This timing was meant to separate the two events, to ensure that the 

politics of the increase would not sour the arrival of the new operator in the eyes of the public. The 

contract was politically contentious during its five year life, not least because there was a certain 

comfort to be found in providing a cheap but substandard service. The contract ended in April 1999. 

In 2003, the Inter-American Development Bank supported a proposal for a 25 year concession for 

water and sewerage services. The contract award process has yet to be started. It is understood that 

this will involve an operating company with 60% of its equity being locally owned, 30% by an 

international company and 10% by Government employees. 

177 


UNITED STATES OF AMERICA 





USD44,470 



Industry (1993) 22% 

Services (1993) 77% 

Regulatory background 

The Environmental Protection Agency (EPA) implements a series of regulatory programs under the 

Clean Water Act (CWA) and the Safe Drinking Water Program. The Federal Water Pollution Control 

Act, or Clean Water Act (1948, last amended 1987) seeks to maintain the "chemical, physical, and 

biological integrity of the Nation's waters." Under the Clean Water Act all discharges to surface waters 

of the U.S. must be treated to the level of secondary treatment. The Safe Drinking Water Act (SDWA), 

amended 1996, requires the EPA to set standards for contaminants in drinking water, monitor drinking 

water quality, and carry out compliance and enforcement actions. By the mid-1980s the federal 

government had spent USD400billion on water resource development. From 1972 to 1998 compliance 

work for the Clean Water Act was supported by USD68billion in federal assistance for the construction 

of local wastewater treatment systems, while state and local governments contributed a further 

USD20billion. 

US drinking water pipe classification, 1980–2020 (%) 

Condition 1980 2000 2020 

(%) 

Excellent 69 43 33 

Good 19 17 11 

Fair 3 18 12 

Poor 3 14 13 

Very poor 2 2 23 

Life elapsed 5 7 9 

Source: US EPA 2002 

Since 2001, there have been various moves to downgrade water and wastewater standards and 

spending priorities, for example, declining to adopt WHO drinking water standards on cost grounds. 

This has led to some uncertainty about the development of longer term spending plans. 


740,000 people lacked access to potable water in 1999. A USD210million project was launched in 

1999 to rectify this through direct investment in suitable distribution facilities. US Environmental 

Protection Agency (EPA) standards were being met or exceeded by more than 90% of water utilities in 

the USA in 1999. These guideline standards are being revised to bring them in line with WHO 

standards. In Western Europe, similar compliance figures are typically in the 95-99% range. In 1994, 

19% of the population (45million people) was served at some point during the year with substandard 

water in terms of bacterial or chemical pollution. In September 2006, the US EPA proposed that 

community water systems (serving more than 25 people) should seek to 91% compliance with drinking 

water standards by 2011 rather than their previous target of 95% by 2008. In 2005, 88% of community 

based water supplies met the applicable health standards. 

Non-compliant water: bacterial contamination 

1993 1994 1995 

Number of systems 1,000 750 400 

Population (million) 12.1 10.8 9.0 

Lead in drinking water has only recently become an area of concern. The proposed Lead-Free 

Drinking Water Act of 2005 is the first major effort to amend the SDWA in 15 years. It would require 

the EPA to re-examine and if necessary, revise the national safety standard for lead in drinking water, 

178 




requiring all water utilities to test for lead. After the initial test, the nation's utilities would have to test 

their lead levels every six months, whether they detect a problem or not. According to the EPA, 4% of 

utilities that serve more than 50,000 people have excessive levels of lead. The proposed law could 

result in spending USD500billion in 20 years to restructure the 1974 Safe Drinking Water Act and the 

1991 amendments. If Congress approves the bill, USD200million will be appropriated every year for 

four years to help replace lead-contaminated water lines. 

Population 






Water quality 

Overall, 50% of the country's 2.4million kilometres of streams and an unknown percentage of the 

nation's groundwater are polluted to a significant degree. In 1996, 19% of the USA’s3.6million miles of 

rivers were surveyed. 56% of the rivers in terms of river length were regarded as being of good quality 

and 8% of fair quality. Some form of pollution or habitat degradation impairs the remaining 36% of the 

surveyed river miles. Excess levels of nitrates and phosphates were noted in 14%, with high bacterial 

levels in 12%. Agricultural waste was noted in 25% and runoffs from municipal sewage treatment 

plants in 5%, with urban runoff and storm sewers affecting a further 5%. Urban sewerage and sewage 

treatment is generally well developed. In contrast, smaller communities have been poorly served to 

date and many municipally run facilities are understood to be in poor condition. 

Sewage treatment development 

1982 1984 1992 1996 

Tertiary 22.8% 27.4% 32.0% 33.0% 

Secondary 25.0% 23.0% 25.0% 24.0% 

Primary 14.0% 13.0% 18.0% 18.0% 

Connected 64.0% 63.0% 75.0% 75.0% 

According to the American Society of Engineers (ASCE), in 2003 there will be an annual shortfall of 

USD11billion for replacing or rehabilitating water and wastewater facilities in the United States. The 

overall condition and performance of the country's drinking water and wastewater systems has 

worsened since the previous evaluation by ACSE in 2001. Currently, the federal government spends 

about USD2.5billion annually for drinking water and wastewater treatment facilities. The proposed 

federal budget for FY 2004 includes a USD360million cut in wastewater funding, while the level for 

drinking water spending remains unchanged. The EPA anticipates that the percentage of the 

population receiving sewage treatment will increase from 66% in 1996 to about 88% by 2016. 







Market size (from various reports, 2002-04) 

There is a market for operating water and sewerage services worth USD47-53billion per annum. The 

market for water supply to households (110million households at an average of USD300 per annum) 

in the USA is worth USD33billion pa. This excludes sewerage services. 

US billion pa High Low Mean 

Water – O&M 32.7 25.7 29.2 

Sewerage – O&M 30.8 21.4 26.1 

Water – Capex 20.1 11.6 15.9 

Sewerage – Capex 20.9 13.0 17.0 

Total 104.5 71.7 88.2 

179 




Depending upon the source, replacing the USA’s aging water and wastewater network and upgrading 

and extending treatment facilities in the United States is expected to cost USD550–1,000billion over 

the next 20 years. Government funding is anticipated to cover USD535billion over the next 20 years, 

according to the US Environmental Protection Agency Water Infrastructure Network. But as shown by 

the limited funds allocated since 1997, this is open to question, with the proportion of costs being 

covered by government funding falling from an average of 50% to an extreme of 10% in 2003. Since 

2000, Government funding has resulted in a projected USD23billion pa shortfall over the next two 

decades. This has to be funded by municipalities, debt and innovative ways of delivering performance 

improvement. 

Another insight is provided from the US Conference of Mayors, cited in GWI (2007). This covers water 

and sewer spending and revenues in 2004-05: 

USDbillion Water Sewer 

Local government revenue 37.12 31.21 

State government revenue 0.19 0.04 

Total revenue 37.32 31.25 

Local government expenditure 45.64 35.15 

State government expenditure 0.32 1.12 

Total expenditure 45.96 36.37 

Non-compliant water supplies 

Systems Reporting Violation Population Affected 

Coliform bacteria 12,246 24.7m 

Inadequate filtration 1,478 20.5m 

Faecal bacteria 2,726 11.9m 

Lead 3,641 5.0m 

Nitrate 588 0.5m 

Chemicals/pesticides 325 0.9m 

Source: Environmental Working Group based on EPA data. US Water News January 1998. 

The treatment of microbiological contaminants in water will require USD20billion, with 35% of surface 

water systems needing filtration equipment installation, upgrading or replacement. Water use rose 

from 1950 to a peak in 1980 and has declined since 1985 as various efficiency and cost accounting 

measures have made an impact. 

Billion US gallons per day 1980 2000 

Cooling water for power 210 195 

Irrigation 150 137 

Municipal 34 43 

Other 46 33 

Total 440 408 

The costs of compliance 

US EPA Needs Assessments and related spending forecasts for drinking water infrastructure 

USDbillion 

EPA 1995 Needs Assessment 138 (166*) 

EPA 1999 Needs Assessment 151 (167*) 

EPA 2003 Needs Assessment 277 

Water Infrastructure Network 1999 Estimate 420* 

Congressional Budget Office 2002 Estimate 245 – 424* 

US EPA 2002 Gap Analysis 170 – 493* 

* rebased to 2003 USD value 

180 




Spending forecasts 

Systems size 

USDbillion 

Large systems (>50,000 people) 122.9 

Medium systems (3,301 – 50,000 people) 103.0 

Small systems (



serving 75,000 or more people. Some 95% of private sector contracts have a turnover of less than 

USD1million pa, equivalent to less than 8,000 people. 

Market structure for water provision 

Total number of entities 56,000 

Local systems 26,000 

Government owned 24,000 

Investor owned 6,000 

US Market listed 11 

Internationally held 4 

A major private sector company may act as the ultimate holding company for a large number of 

individual water companies. American Water Works (RWE), the largest water company in the USA 

serves 879 separate communities, at an average of 8,500 people per community. 80% of water supply 

systems are groundwater based, while less than 10% use surface water alone. The larger companies 

tend to make more use of surface water. According to the EPA, 84% of the systems serving more than 

75,000 people use surface water. 

Water provision market structures 

Structure Size of Operation Number of Service Est. Population 

(Population Served) Providers 

Served (million) 

Very Large >100,000 350 116.3 

Large 10,001 - 100,000 3,432 96.5 

Medium 3,301 - 10,000 4,498 26.1 

Small 501 - 3,300 14,341 20.1 

Very Small



new environmental and public health standards at a time of spending constraints and a dislike of 

higher bills. The Presidential Executive Order 12803 of 1997 was designed to encourage privatepublic 

service partnerships, allowing the use of non-recourse taxable and tax exempt debt financing. In 

addition, if a STW is privatised, previous grants do not have to be repaid in full. Instead, these can be 

amortised. This process was first used for Cranston, Rhode Island in 1998. At the same time, the IRS 

announced that it would allow privatisation related operating contracts to run for up to 20 years. 

Breakdown of USA water and wastewater services market, 2001 

Million people Water Sewerage 

Regulated utilities 23.5 8.8% 0.8 0.3% 

Municipal outsourcing 18.0 6.5% 21.6 7.8% 

Municipal 192.8 69.5% 185.0 63.9% 

Privately served 42.0 15.2% 77.4 28.0% 

Total 276.2 100.0% 276.2 100.0% 

Source: D A Ll Owen, company database, US EPA. 

It is easier to gain a concession for sewerage than for drinking water projects, where contract awards 

to date have been on an O&M basis. New legislation will be needed to change this. One of the 

principal constraints is the use of rate of return (ROR) pricing mechanisms. With ROR, excessive 

investment can be called for to boost overall returns, while contract management costs are boosted by 

their need to be reviewed every 12-18 months. While the traditional private sector water companies 

tend to concentrate on water provision contracts, the majority of actual privatisations to take place 

since 1996 and especially since 1998 have been for sewerage and sewage treatment. 

MAJOR CITIES 


New York 18,718,000 19,876,000 Some districts with PPP 

Los Angeles 12,298,000 13,095,000 Some districts with PPP 

Chicago 8,814,000 9,469,000 BOO for sewage treatment underway 

Washington, D.C. 4,238,000 4,613,000 PSP under consideration 

Philadelphia 5,392,000 5,806,000 Some districts with PPP 

San Francisco 3,385,000 3,666,000 Water construction PPP underway 

Dallas 4,665,000 5,121,000 N/A 

Detroit 4,034,000 4,342,000 PSP water provision 

Houston 4,320,000 4,767,000 Partl PPP, United Water Resources 

Boston 4,361,000 4,751,000 N/A 

San Diego 2,852,000 3,110,000 PSP under consideration 

Atlanta 4,304,000 4,864,000 Sewerage management PPP 

Phoenix 3,416,000 3,822,000 N/A 

Minneapolis 2,556,000 2,795,000 N/A 

Miami 5,380,000 6,034,000 Some sewage treatment outsourcing 

Seattle 2,989,000 3,289,000 Private water provision contract 

Saint Louis 2,159,000 2,346,000 N/A 

Tampa 2,252,000 2,481,000 DBO contract for water treatment 

Baltimore 2,205,000 2,410,000 N/A 

Cleveland 1,855,000 2,019,000 N/A 

Pittsburgh 1,806,000 1,962,000 N/A 

Riverside – SB 1,690,000 1,882,000 N/A 

Denver 2,239,000 2,489,000 N/A 

San Jose 1,631,000 1,781,000 N/A 

Fort Lauderdale 1,471,000 1,689,000 N/A 

Kansas City 1,437,000 1,576,000 N/A 

Sacramento 1,550,000 1,731,000 N/A 

Portland 1,810,000 2,025,000 N/A 

Cincinnati 1,599,000 1,755,000 N/A 

San Antonio 1,436,000 1,585,000 N/A 

Milwaukee 1,361,000 1,488,000 Private-public partnership for sewage 

Norfolk 1,963,000 2,329,000 N/A 

Orlando N/A N/A N/A 

183 





Virginia Beach 1,460,000 1,598,000 N/A 

New Orleans 1,010,000 1,096,000 Sewage treatment PPP 

Columbus 1,236,000 1,370,000 N/A 

Indianapolis 1,387,000 1,554,000 PSP under consideration 

Las Vegas 1,720,000 2,001,000 N/A 

Buffalo 999,000 1,091,000 Water management PPP 

Providence 1,248,000 1,374,000 N/A 

Salt Lake City 943,000 1,042,000 N/A 

Oklahoma City 773,000 850,000 Sewage treatment PPP 

Memphis 1,053,000 1,167,000 N/A 

Jacksonville 961,000 1,069,000 N/A 

Louisville 924,000 1,023,000 N/A 

Austin 1,107,000 1,271,000 N/A 

Charlotte 946,000 1,093,000 N/A 

Bridgeport-Stamford 987,000 1,103,000 N/A 

Hartford 894,000 984,000 N/A 

Nashville 848,000 954,000 N/A 

Richmond 888,000 987,000 N/A 

As there are two separate markets for PSP in the USA, it is necessary to split corporate activities into 

those where the assets are owned by the private sector (regulated activities) and those where they 

remain in municipal hands (O&M). The former has a turnover of USD100-150 per capita against 

USD35-40 for the latter. The tables below ranks the major players in terms of population served in 

both classes: 

Leading regulated utilities (Y/E 31/12/2003, US million) 

Company Parent company People served 

American Water Works American Water Works 12,400,000 

United Water Resources Suez Environnement 1,983,000 

Aqua America Aqua America 3,100,000 

California Water Service California Water Service 2,000,000 

Southern California Water American States Water 950,000 

San Jose Water SWJ Corp 1,100,000 

Aquarion McQuarrie 677,000 

Utilities Inc AIG 1,000,000 

Middlesex Water Middlesex Water 385,000 

Southwest Water Southwest Water 510,000 

Connecticut Water Service Connecticut Water Service 278,000 

Artesian Water Company Artesian Resources 250,000 

Pennichuck Water Pennichuck Corporation 130,000 

York Water York Water 171,000 

Global Water Resources Global Water Resources 110,000 

Total 25,044,000 

Numbers are below those for 2002, except where indicated, due to various companies being sold off 

during 2003-06. 

184 




Development of O&M and DBO outsourcing contract awards in the USA, 1997-2007 

USD (million) 1997 1999 2001 2003 2005 2007 

Municipal O&M 601 802 921 1,050 1,139 1,184 

Industrial O&M 22 314 347 161 153 171 

Total O&M 623 1,116 1,268 1,211 1,292 1,355 

Municipal DBO 16 178 137 173 217 112 

Industrial DBO 22 158 44 50 1 5 

Total DBO 38 336 181 222 218 117 

Total reported revenue 661 1,452 1,449 1,433 1,509 1,472 

Other companies 99 218 217 215 226 221 

Total market 670 1,670 1,666 1,648 1,735 1,693 

Source: Public Works Financing, March 2003 – April 2008 

As there are two separate markets for PSP in the USA, it is necessary to split corporate activities into 

those where the assets are owned by the private sector (regulated activities) and those where they 

remain in municipal hands (O&M). The former has a turnover of USD100-150 per capita against 

USD35-40 for the latter. The table below ranks the major players in terms of populations served in 

both classes: 

In 1999 there were 13 companies surveyed by PWF, which had fallen to 5 by 2006 and 2007. In fact, 

there are 8 major active players (for example AWW could not be surveyed as it was preparing for its 

IPO). The percentage of such contracts being renewed by the incumbent company rose from 88% to 

98% during this period. The fragmented nature of the market is highlighted by an order backlog of 

USD5,806million for 1,998 reported contracts in 2007. United Water acquired Aquarion Operating 

Services (2006 revenues USD29million) in 2007, along with Utility Service Co in 2008 (2008 revenues 

are forecast to be USD120million). 

Leading O & M companies (Y/E 12/2007, USDmillion) 

Company Parent Total O&M DBO People served 

US Filter OS VE 438 373 64 10,500,000 

United Water Suez 216 216 0 5,250,000 

OMI CH2M Hill 193 181 12 5,000,000 

AWS AWW 175 139 36 6,000,000 

Severn Trent OS Severn Trent 99 99 0 2,715,000 

Earth Tech Tyco 135 135 0 2,145,000 

Eco Resources South West Water 120 120 0 1,440,000 

Alliance Water Privately held 20 20 0 230,000 

Total 1,297 1,184 112 35,645,000 

Source: Public Works Financing, March 2003, April 2008, company data. 

Sources: 

GWI (2007) US mayors press for private funds, GWI, July 2997, Oxford 

Public Works Financing, March 2003 

Public Works Financing, April 2008 

185 


URUGUAY 


URUGUAY 



USD5,310 


USD11,150 





Access to safe water in Uruguay is high by South American standards, at 88%, with 45% of water 

subject to treatment. Although 92% have sanitation, only 48% are linked to the sewers and the on-site 

sanitation is normally considered inadequate. The quantity and quality of coverage is better in the 

capital, Montevideo, than in the provincial towns or rural areas. Many residents have restrictions on 

supply during the summer months. The state owned national utility, Administración de las Obras 

Sanitarias del Estado (OSE) provides water and sewer services to urban areas excepting Montevideo, 

where it provides the water service. OSE serves 330 localities with 2.8million inhabitants with water 

services and 152 localities with 0.5million inhabitants with sewerage services. 

Population 

2007 (million) 3.4 

2020 (million) 3.8 




Sewerage development 

The Government’s current priority is for the development of a sewerage network and suitable 

treatment facilities. Currently, 47million m 3 pa of effluents are treated in the city of Montevideo and a 

further 22million m 3 in other provincial cities. The World Bank has provided USD42million of the 

USD73million currently being spent on this work. In May 2003, OSE, Uruguay’s state water utility, 

called for tenders for its USD48million modernisation and systems rehabilitation program project. This 

includes the construction of a water supply main in the city of Salto and the construction of a new 

wastewater treatment plant for Durazno. The project is partly financed by a USD27million loan from 

the World Bank. 







Freshwater 




Domestic 6% 

Industrial 3% 


A cooling climate 

In 2005, Uruguay held a referendum on water policy, where a majority was found in favour of water 

and sewerage services being the responsibility of the state. This vote applies to new contracts. 

In 1997 Aguas de Barcelona acquired 60% of Aguas de la Costa which holds a Punta del Este 

concession, originally granted in 1993, which carries a 10 year optional extension from 2018. While 

Agbar sold its stake to the government’s OSE in July 2006, its local partners (STA Ingenieros, 30% 

186 


URUGUAY 


and Benencio, 10%) are continuing to operate the concession. Aguas de la Costa serves La Barra and 

San Ignacio. 

The Punta del Este area is principally used for upmarket tourism and leisure services. Iberdrola and C 

de Aguas de Bilbao Bizkaia gained a USD150million concession serving 40,000 connections in the 

area in 2000. The concession was revoked in 2005 in the wake of the referendum. 

Groundwater 



OSE invested USD797million on capital projects between 1990 and 2005. Capital spending has 

declined markedly 2001, typically running at USD5 per capita per annum since then. In 2007, OSE 

announced plans to increase its annual investment from USD35million pa to USD55-60million pa for 

the next 4-5 years, via OSE's revenues and through by multilateral banks. 

MAJOR CITIES 


Montevideo 1,264,000 1,277,000 N/A 



Punta del Este 25 year water and sewerage concession Aguas de la Costa 




Aguas de la Costa STA / Benencio (Uruguay) 100,000 100,000 100,000 

187 


VENEZUELA 


VENEZUELA 



USD6,070 


USD7,440 




A late entrant 

Venezuela was opposed to the privatisation of its water and utility services long after it had become 

acceptable across much of Latin America. The country’s water services were split into 10 regional 

entities and Hidrocapital in 1989. Problems in raising finance for capital projects in recent years have 

led the country to reconsider its position on private sector participation. An initial attempt to introduce 

PSP in Caracas in 1992 failed due to a lack of interested bidders. In 1996, the government announced 

that it needed USD1billion to upgrade water and sewerage services across the country, including 

USD500million for Caracas. Venezuela intended to spend USD533million on water and sewerage 

service upgrades in 1997, but some of this work had to be scaled back due to economic perturbations. 

The IADB provided USD102million for water and sewerage upgrading work in 1998. Between 1997 

and 2001, a total of USD637million was in fact spent on water and sanitation projects. 

International funds from oil reserves are bing used to fund USD2billion worth of public projects. The 

fund will allow the acceleration of some development projects already underway, such as the 

USD58million El Diluvio dam and the USD100million Metro de Los Teques system in Miranda state. 

In 2004, Venezuela announced that it has already met its potable water millennium goal of reducing by 

half the number of people (based on 1990 figures) who do not have access to potable water, having 

attained an 88% coverage. According to the government, this goal will be reached for sewerage in 

2010. The country aims to have 100% water coverage by 2015, along with 40% of sewage being 

treated. In total, some USD4.77billion is intended to be invested on various projects between 2003 

and 2015. 

In 2007, President Hugo Chávez announced that the target for universal water and sewerage 

coverage was being put forward to 2010. According to Chávez, potable water coverage was 93% in 

2007 along with 80% sewerage coverage. 

From 2007, the Ley Orgánica para el Servicio de Agua Potable y Saneamiento (the 2001 Organic Law 

for Services of Fresh Drinking Water and Sanitation) will devolve water and sanitation responsibilities 

to the municipal level, the services of which will, in theory, be provided by any of a number of agents 

or partnerships among them: private, public, community or NGO. The process has in fact been 

delayed, although approximately 20 local cooperatives have come into operation. 

Population 

2007 (million) 26.1 

2020 (million) 33.5 




Caracas and Hidrocapital 

Water and sewerage services for Caracas and the state of Miranda are provided by Hidrocapital. 

Hidrocapital was corporatised in 1981, and operates a 90km aqueduct serving part of the city of 

Caracas. The company has 340,000 customers, 64,000 of whom pay their bills, while there are some 

200,000 illegal or unregistered connections. In all, some 57% of water provided by Hidrocapital is 

unaccounted for. Hidrocapital has gained finance for a USD50million upgrade that is to be linked to 

better billing. In Caracas, 76% of the population receive piped water and the sewerage network covers 

53% of the population. Officially, 91% of the country’s urban population has access to safe water and 

97% have adequate sanitation. In 2004, 74% of the urban population had household access to piped 

water and 78% access to adequate sanitation. 

188 


VENEZUELA 








Hidroven 

Outside Caracas, water is managed by the state’s Hidroven utility. This entity has a number of affiliate 

companies. Comphania Hidrologicadel Lago (Hidrolago), for example serves the state of Zulia. 

Freshwater 


Per capita 35,002 m³ 





PSP in Venezuela 

Private sector involvement began in 1997, when FCC of Spain was awarded a four year extendable 

water provision concession to the city of Monagas (620,000 people). This was not renewed when it 

expired in 2001. Aguas de Valencia gained a 4 year water management contract for Lara state 

(population 1,100,000 people) worth USD20million pa in 1999. This contract ended in 2002. 

Three PSP contracts have at various times since 2000 been under development. The Caracas water 

system may be rehabilitated under private sector management. The city had a population of 3.01 

million in 1995. PSPs are also under consideration for Miranda state’s Fajardo water system and 

Margarita Island’s water and sewerage services through the award of a concession contract. 

The Chavez administration is distinctly cool towards further private sector involvement, but not 

necessarily opposed to it. 

Groundwater 



Zulia state 

In 2001 Tecnicas Valencianas del Agua and Colombia’s Triple A gained an O&M contract with 

Hidrolago for the state of Zulia, including Maracaibo, Venezuela’s second largest city. A total of 

21 municipalities will be served, covering a population of 3.5million people. The contract is worth 

USD40million pa. 

MAJOR CITIES 


Caracas 2,913,000 3,144,000 PSP under consideration 

Maracaibo 2,255,000 2,911,000 O&M contract awarded 

Valencia 2,451,000 3,499,000 N/A 

Maracay 1,168,000 1,463,000 N/A 

Barquisimeto 1,029,000 1,243,000 N/A 



Monagas 30 year water provision concession Proactiva 

Zulia State Water O&M Tecvasa 




Proactiva VE (France)/FCC (Spain) 650,000 0 650,000 

189 


VENEZUELA 


Tecvasa Tecvasa (Spain) 3,500,000 0 3,500,00 

0 

190 


VIETNAM 

PART2: COUNTRY ANALYSIS 

VIETNAM 



USD690 


USD3,300 




Management 

The Ministry of Science, Technology and the Environment was created in 1992, with the framework 

Law on Environmental Protection passed in 1993 and in effect since 1994. The MOSTE’s National 

Environmental Agency was set up in 1994. This resulted in a Country Programme for Clean Water 

Supply and Environmental Sanitation in 1995. The Ministry of Planning and Investment (created in 

1995) has to approve all environment-related projects above a certain size. 

Water losses of 45-70% were identified, in the early to mid 1990s. The recent “open door” policy has 

increased the pace of change by exposing companies to new markets, improved material standards 

and quality, and the transfer of technology. In 1994, the Ministry of Urban Construction (MUC) with the 

assistance of the World Bank issued an order to water companies to reduce water loss by 50% by 

2005, and issued guidelines on how this should be achieved. The MUC proposed that water entities 

review losses, identify the loss components and calculate the cost of control, meanwhile eliminating 

flat rate tariffs so as to encourage water conservation. The main source of water loss is from illegal 

connections or illegal use, and from consumer meter under-registration. The MUD has in consequence 

sought to ensure that all consumers are metered along with introducing organisational changes to 

improve the accountability of the meter readers. 

Population 

2007 (million) 82.2 

2020 (million) 99.9 




Policies and priorities 

73% of urban households in 2004 had access to piped water. In the major cities, 80% of households 

have access to piped water or private wells. Average urban water consumption is 50-70L per capita 

per day. 34% of households are either connected to the sewerage system or have septic tanks. Other 

households either share facilities or use latrines, with 92% having adequate service in 2004. 

Vietnam is seeking to spend some USD1billion on reaching 85% safe water coverage by 2010 and 

100% coverage by 2020. In March 1999, a decree was passed seeking to have 60-80% of urban 

sewage and storm waters connected to a sewerage network by 2020, with 90-100% coverage in 

Hanoi, Ho Chi Minh City and other major cities and industrial zones. The Government expects this to 

be self-funded through payments from the public and industry. The intention is to create a series of 

non-profit urban drainage public service corporations. Between 1999 and 2005, the focus will be on 

developing storm sewerage systems for Hanoi and Ho Chi Minh City. Currently state and international 

investment is running at USD0.6 per capita pa against an estimated need of USD15 per capita pa. 

These plans are based on uniform tariffs introduced in 1999 with the long term aim of cost recovery, 

devolving water management to the municipal level and a more positive approach to the private sector 

as agreed at the 10 th Party Congress in 2006. In 2004 drinking water distribution was classified as a 

commercial activity. Particular issues are 21-44% distribution losses in the largest cities, intermittent 

supplies in some cities and the need to raise investment in water from 0.6% of GDP to 1.2% of GDP 

for the 2010 plans (ADB, 2007). 






With sewage treatment 2% 

191 


VIETNAM 


Corporatisation: Tra Vinh 

The Tra Vinh Water Supply Company (TWSC) is a state-owned enterprise owned by the Tra Vinh 

Provincial Government. It received AusAID funding to rehabilitate its network in the 1990s. Following 

its rehabilitation in 1998, the enterprise was corporatised under the 1995 Government Decree No. 

14/CP on State Corporations. Despite having had no water tariff increases since 1998, TWSC has 

been profitable in every year since it was corporatised in 1998. It reported profits of 20% on total 

revenues in 2003-2004, 15 % of which was reinvested in system expansion. The company has also 

not received any subsidies from the government despite it having a program to assist low-income and 

ethnic minority households with providing loans without interest for new meters and pipes in new 

connections. Current plans include the introduction of a rising block tariff system which will penalise 

high volume users and addressing the 42% water losses from those pipes which were not rehabilitated 

in the 1990s. 

Private sector involvement 

With the exception of Hanoi and Ho Chi Minh City, current projects are mainly aid related. For 

example, a 10 year bulk water supply project for Hai Phong (population 570,000) has been underway 

since 1990, involving USD20million of ODA from Finland, along with USD5million from the Vietnamese 

Government. This project was extended in 1999 with a USD29million project to expand the city’s water 

provision network between 1999 and 2002. The World Bank is also active in Vietnam, having provided 

a loan of USD32.5million for a USD48.5million project to expand Hanoi’s water supplies (currently 

100,000m 3 per day) through two new 30,000m 3 per day water treatment works along with allied water 

distribution systems. 

Freshwater 







Local players emerge 

In the southern province of Tien Giang, non-state water companies serve about 65% of the 1.6million 

inhabitants. These include private investors with borrowed capital, cooperatives investing in and 

managing their own systems, and user groups that have raised capital themselves. 

Investment in piped water schemes in Tien Giang Province, Vietnam 

State (& state subsidies) 39% 

User groups 34% 

Cooperatives 10% 

Private investors 17% 

In one case, an individual raised USD23,000 to connect 600 households with piped water in 2002-03, 

charging at the government rate of USD0.25 per m 3 . 

Groundwater 



Setbacks for the private sector 

In August 2000, the Government announced that no foreign investment would be allowed in Hanoi, 

while no further foreign BOT contracts would be awarded. Then in 2003, Suez withdrew from its 

Ho Chi Minh BOT, as part of a corporate retreat from riskier markets. Subsequently, the Asian 

Development Bank has indicated that it was not happy with Ho Chi Minh City’s decision to seek new 

bids solely from Vietnamese companies for the 300,000m 3 per day Thu Duc water treatment BOT. 

192 


VIETNAM 




Ho Chi Minh City 20 year bulk water provision BOT BAWT 




BAWT Salcon (Malaysia) 500,000 0 500,000 

Since 1996, 11% of Ho Chi Minh City’s water (100,000m 3 per day) has been provided through a 

USD38million 20 year BOT project managed by the Binh An Water Treatment Company (BAWT), a 

Malaysian consortium consisting of Salcon and IJM. The 1998 currency devaluation required an 

USD25million ADB loan to secure the project. 

MAJOR CITIES 


Ho Chi Minh City 4,164,000 5,320,000 Bulk water provision part PPP 

Hanoi 4,164,000 5,320,000 PSP under consideration 

Hai Phong 1,873,000 2,411,000 N/A 

City study: Hanoi 

The Hanoi Water Supply Company was set up in 1954 by Hanoi’s Department of Transport and Public 

Works. In 1991, 620,000 people were served by 51,705 household connections, with a further 238,000 

being served by public taps at an average ratio of one tap per 170 people. 69% of people within the 

city area were served with water for an average of 12 hours per day. Leakage was estimated at 53% 

in 1991 and drinking water was typically boiled before use. 

In Hanoi, water loss is increasing (currently 160,000m 3 /day) while the source is being depleted - the 

groundwater level is dropping by 1.0m/year. By 1994, 32% of total production was billed. The 68% of 

water unaccounted for comprised 43% typically referred to as distribution losses, 20% identified 

leakage, and 5% for the water company’s own use. The volume of billed water is currently decreasing, 

despite the repair of 1000 leaks/year and disconnection of 2000 illegal connections each year. It is 

therefore assumed that the rate of increase of illegal connections is greater than the rate of leak repair. 

Consumer studies are seen as an immediate requirement to identify or address consumer waste, 

illegal connections, tariff charges, and consumer contracts. Currently, 50% of Hanoi’s 200,000 

customers have contracts for revenue payment. The Hanoi water sector was reorganised in early 1994 

into a new company the Hanoi Water Business Company, whose business aims are to have 100% of 

consumers registered, all with meters and at least 85% of water costs recovered through tariff 

collection, supported by a 24 hour service level. 

Sources: 

ADB (2007) Country Paper: Vietnam. Asian Water Development Outlook, ADB, Manila 


Manila 

AusAid (2005) Water Governance in Context: Lessons for Development Assistance, AusAid, Sydney, 

Australia 

WSP Field Notes (2004): Private Sector Engagement in Rural Water Supply in the Mekong Region: 

Tapping the Market 

193 


PART 3(i) COMPANY ANALYIS 

PART 3(i): COMPANY ANALYSIS 

194 


FRANCE 

PART 3(i): COMPANY ANALYSIS MAJOR PLAYERS-SAUR 

SAUR / Séché, CDC, & Axa 

Société d’Aménagement Urbain et Rural (SAUR) was founded in 1933, making it the last of the major 

French water companies. Bouygues (see separate entry) acquired SAUR in 1984. SAUR has been 

associated more with small towns and rural municipalities than either Suez or Veolia Environment 

(VE). Bouygues sold SAUR (net of its Italian and African activities) to PAI Partners, the French private 

equity house in January 2005. In March 2007, PAI announced that it was to sell SAUR to Hime, a 

consortium comprising of Caisse des Dépôts et Consignations (33%), Séché Environnement (33%) 

and Axa Investment Managers (33%) for EUR1.47billion. In May 2008, CDC granted Séché an 18% 

option in Hime that if exercised will raise Séché’s stake to 51% and paves the way for Séché to take 

complete ownership of Hime. Séché has a market listing in France and this would in turn allow the 

company to have a full market presence again. 

Saur / Novasaur / Hime 

Y/E (EURmillion) 2003 [1] 2004 [1] 2005 [2] 2006 [3] 2007 [3] 

Net sales 1,591.6 1,570.3 309.5 1,436.0 1,472.0 

EBITDA N/A 186.6 12.7 152.0 157.0 

Operating income 87.8 91.1 2.7 776.0 71.0 

Pre-tax income 67.4 83.8 -5.9 N/A N/A 

Net income -16.7 -2.5 -4.6 N/A N/A 

[1] 2003 & 2004: Y/E 31/12 

[2] 2005: 3 months to 31/03 

[3] 2006 & 2007: Y/E 31/12 

Including long term technical assistance projects (mainly in Saudi Arabia) SAUR serves 12million 

people internationally with 710million m 3 per annum of water being provided. 

SAUR water services revenues 

SAUR (EURmillion) 2004 2005 [1] 2006 [1] 2007 [1] 

Saur France 832.4 842.3 896.1 935.0 

Saur International 80.6 86.3 94.5 95.0 

Total 913.0 928.6 990.6 1,030.0 

2004 Y/E is to 31/12, 2005, 2006 & 2007 [1] Y/E is to 31/03 

The new entity, including Stereau (water engineering in France and internationally) and Coved (waste 

management services in France) had a consolidated turnover of EUR1.3billion in 2004. Post the 

divestment of the Italian and African activities, 95% of SAUR’s 2007 revenues came from France 

(65% Saur, 21% Coved & 7% Stereau), with 78% of the groups revenues being from water. 

SAUR, population served 

Country Water Sewerage Total 

France 5,500,000 5,500,000 5,500,000 

Argentina 1,200,000 950,000 1,200,000 

China 3,500,000 0 3,500,000 

Armenia 750,000 750,000 750,000 

French Overseas Territories 359,000 14,000 359,000 

Poland 502,000 550,000 550,000 

Scotland 0 400,000 400,000 

Spain 720,000 460,000 720,000 

Total – Outside France 7,031,000 3,124,000 7,499,000 

Global total 12,531,000 8,624,000 12,999,000 

195 


FRANCE 


In France, SAUR provides water and sewerage services to 5.5million people, serving 6,700 

communities with water supply and sewerage services through 5,700 water and sewage treatment 

contracts. Cise was acquired in 1997 and served approximately 3.0million people, mainly for water 

alone and contributed F3.2billion in 1996. Customer numbers rose by 1.5% and prices by 1.5% in 

2000. In September 2000, Cise was renamed SAUR France. SAUR France was renamed Water 

Services in France in October 2006. Net water distribution and sanitation sales rose by 4.2% in 2006 

to EUR514.9million after a 0.6% reduction in metered consumption. More than 90% of contracts up for 

award during 2006 and 2007 were retained. Septic tank maintenance is provided to some 1million 

people in 2,000 communities. 

UK – Scotia Water 

1999 Dalmuir, Glasgow 25 year PFI BOT 600,000, PE sewage treatment 

Scotia Water (SAUR UK/Stereau (SAUR), Innisfree, Taylor Woodrow, Barr & Halcrow) constructed the 

replacement of Glasgow West’s sewage treatment works which were built in 1904. The new Dalmuir 

facility offers increased effluent handling capacity and an appreciably higher degree of treatment. 

Stereau was paid EUR21million for hardware and SAUR receives EUR2.5million pa for the operational 

life of the contract. 

Spain 

In October 2007, SAUR sold its 33% stake in Aguas de Valencia (AgVal) to Suez Environment for 

EUR135million. SAUR's EMALSA and Gestagua provide water services to 720,000 people and 

sewerage to 460,000 people. EMALSA and Gestagua had a consolidated turnover of EUR46million 

and EUR30million in 2003 respectively. EMALSA is a JV run between SAUR, Endesa of Spain and the 

Las Palmas municipality, which provides water via three desalination plants to a total of 400,000 

people and sewerage and sewage treatment for 300,000 people. Gestagua provides water to 320,000 

people and sewerage and sewage treatment for 159,400 people. In 2007, the Fuengirola concession 

was extended for a further ten years, serving 50,000 people rising to a seasonal peak of 120,000 

people. 

Gdansk, Poland 

SAUR Neptune Gdansk, a water and sewerage management JV with the municipality of Gdansk and 

Sopot, started in late 1992 and runs until 2010. The venture is charging PLN3.95/m³ (USD0.184) for 

drinking water and PLN3.45 /m³ (USD0.162) for sewerage services to 470,000 people in the city and 

505,000 people overall. The increase in fees has been 36% below the rate of inflation. SAUR holds 

50.99% of the company. Water quality has moved from 8% EU compliant in 1992 to 87% by 2000, 

while distribution losses have fallen from approximately 25% in 1992 to 12% in 2007, service 

compliance rising from 8% in 1992 to 86% in 2002-07. STWs now operate at secondary level and are 

to be upgraded to tertiary level standard in line with the UWWTD by 2010. The contract generated 

sales of PLN144million in 2007 and PLN140million in 2006, with a post tax profit of PLN5.1million and 

PLN4.6million respectively. Between 1999 and 2004, SNG gained ISO 9001, 18001 and 14001 

certification, along with overall quality and service certification in 2006. 

Armenia 

2004 National Four year O&M 750,000 water & sewerage 

This contract for the Armenian Water and Sewerage Company was developed on the lines of the 

original Yerevan Water contract (see ACEA company entry), the management contract model is now 

being implemented. In 2004 SAUR was awarded a four-year management contract, supported by a 

World Bank loan. In 2008 a two year extension may be granted or changed to a lease contract if more 

appropriate at this time. 

Argentina 

1998 Mendoza 95 year BOT 1.14million water & sewerage 

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SAUR (32%), Enron (32%) and Italgas (4.5%) acquired Obras Sanitarias de Mendoza from Mendoza 

municipality for USD132.7million. Enron sold its stake to South Water SA of Argentina in 2004. 

Because of the Peso crisis revenues fell from EUR20million in 2002 to EUR18.3million in 2003 and 

EUR16.6million in 2004. During 1998, the billing collection rate improved from 80% to 90% as the 

consortium introduced more professional operations management procedures. The province has 

1.6million inhabitants with 320,000 water connections serving 1.14million people. The population 

served by sewerage and sewage treatment has increased from 880,000 in 2001 to 950,000 by 2003. 

In 2006, the company had 10 water and 10 wastewater treatment works, with a capacity of 5,996L/sec 

(518,050m 3 /day) and 3,550L/sec (302,400m 3 /day) respectively. The contract was renegotiated in 

2006. 

West Indies and Reunion Island 

Three contracts for the various French Overseas Territories. 

La Réunion Martinique Guadeloupe Total 


Connections 86,726 22,084 10,575 119,385 

People served 260,000 68,100 31,100 359,200 

Sewage treatment 

People served 13,500 2,618 2,425 14,043 

Turnover (EURmillion, 

2001) 

27.0 8.5 6.9 42.4 

China – Shanghai Fengxian SAUR Water (SFSW) 

2001 Shanghai Fengxian 28 year concession 700,000 water provision 

Shanghai Fengxian is a district to the south-west of Shanghai. The plant, operated by SFSW, has a 

production capacity of 100,000m 3 /day and supplies drinking water to 700,000 people. SFSW is equally 

owned by SAUR International and a local investment company, and is involved in leakage loss 

detection across the district's distribution network. Under current conditions, the 28-year contract has 

aggregate sales of approximately EUR84million and generated sales of EUR7million pa. SAUR sold 

50% of its stake in Shanghai Fengxian SAUR Water (SFSW) for EUR5.5million in 2006. These had a 

book value of EUR5.6million at the time. 

1996 Harbin 28 year BOT and O&M 2,800,000 water provision 

This is a 0.225million m 3 /day water treatment plant construction plus management project, which is 

being operated jointly with the Harbin Water Company. Harbin has a total population of 2.8million. In 

1999, Harbin SAUR Water was the first company in the Chinese water sector to be awarded ISO 9000 

certification by an international organisation. 

Contact Details 

Name: SAUR 

Address: Atlantis, 1 av Eugene Freyssinet, 78064 

St-Quentin-en-Yvelines Cedex, France 

Tel: +33 1 30 60 22 60 

www.saur.com 

www.osm.com.ar 

Web: 

www.gestagua.es 

www.sng.com.pl 

Joel Seche (Chairman of Hime, President of SAUR) 

Oliver Brousse (MD, Hime & SAUR) 

Patrick Barthelemy (Deputy CEO, SAUR France) 

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PART 3(i): COMPANY ANALYSIS MAJOR PLAYERS - SUEZ 

SUEZ ENVIRONNNEMENT SA 

Suez Environnement SA is the second largest water and wastewater company in France, but remains 

the world’s leading international player in terms of the number of people served through its water and 

wastewater operations. The company has gained many of its contracts via contacts made through the 

water and sewerage engineering design and build projects carried out by its Degrémont subsidiary. 

Degrémont is currently operating in 40 countries and has worked in 70 countries over the past 30 

years. Suez believes that 1billion people receive drinking water from its treatment plants, including 

20% of China’s urban population. Since 2003, Suez has reversed its expansion strategy, partly in 

order to ease its debt burden. Some contracts have been sold and others handed back, especially in 

developing economies. Suez is continuing to expand in Europe, North America, India and China. After 

the merger of Suez and Gas de France (GDF Suez) Suez sold 65% of its water and waste 

management activities in July 2008, 12% to a group of long term holders and 53% to private and 

institutional investors. This is the third time that the company has in essence been a water and waste 

management entity – Lyonnaise des Eaux (to 1990, then a merger with Dumez), Lyonnaise des Eaux 

(1993-97, then a merger with Suez) and Suez Environnement (2008-). 

Suez Environnement, profit and loss account 

Y/E 31/12 (EURmillion) 2005 2006 2007 

Turnover 11,092.0 11,446.6 12,034.1 

EBITDA 1,911.8 1,985.4 2,103.6 

Operating income 999.8 1,060.4 1,061.4 

Net income 659.4 573.8 491.7 

Earnings/share (EUR) 1,35 1.17 1.00 

Dividends/share (EUR) N/A N/A N/A 

Société Lyonnaise des Eaux et de l’Eclairage was founded in 1880, making it the third oldest private 

sector water company in France. Major contract gains at the outset included Cannes (1880), 

Barcelona (1881), Dunkirk (1902) and Casablanca (1914). In turnover terms, the company was 

traditionally one of the smaller French multi-utility service and construction companies. This has been 

changed by the mergers carried out in 1990 and 1997, the former with Dumez SA of France 

(construction) and the latter with Compagnie Financiere Suez SA of Belgium (power and waste 

management). The former was to ensure that La Lyonnaise was too large for Bouygues SA to bid for 

and the latter to create a multi-utility at least equal to VE, its traditional rival. 

Suez-Highlights 

1880: Société Lyonnaise des Eaux et de l’Eclairage founded 

1914-46: Activities in Morocco, Tunisia, Togo, Congo & New Caledonia 

1939: Degrémont founded 

1947: Electricity activities in France nationalised 

1958: 300,000 subscribers in France 

1972: Acquisition of Degrémont 

1980-90: Enters Spain, UK & USA for water provision 

1990: Merger with Dumez SA 

1991: Acquisition of SDI 

1996: Acquisition of Northumbrian Water Plc for F7.4billion 

1996: Buys out Eau et Force SA 

1997: Merger with Compagnie Suez 

1997: Buys out Degrémont SA 

1998: Acquisition of Browning Ferris International 

1999: Acquisition of Nalco and Calgon, buy back of Browning Ferris’s stake in SITA 

2000: Lyonnaise des Eaux organised into three divisions 

2001: S-LDE renamed Suez, LDE renamed Ondeo 

2002: Creation of Environmental Division (Ondeo and SITA) 

2003: Partial divestment of Northumbrian, other contracts handed back, Calgon sold 

2004: Partial divestment of EMOS, Puerto Rico contract handed back, Nalco sold 

2005: Rest of Northumbrian sold 

2006: Contracts closed in Argentina, Brazilian activities sold 

2007: AISA contract ends in Bolivia, expansion in USA, MENA, India & China 

2008: Suez Environnment spun off from Suez, acquires Agbar & AgVal stake 

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From 1914 to 1946, Société Lyonnaise des Eaux provided water services in Morocco, Tunisia, Togo, 

Congo and New Caledonia. These were nationalised in 1946. In 1972 the company sought to re-enter 

the international market through the acquisition of Degrémont. Contracts and acquisitions were gained 

in Spain, the UK and USA between 1980 and 1990, along with the acquisition of SDI in France in 

1991. By 1993, the company served 40million people (25.5million outside France). Since then, Suez 

has increased its international activities fourfold, through major contract gains, the 1996 acquisition of 

Northumbrian Water Plc, the acquisition of Aquas Andinas in Chile and acquisitions in the USA. 

In 2008, Suez Environnement also attained overall ownership of Agbar (see company entry) jointly 

with Caxia Holding of Spain. This cements a relationship that started in 1991. This has been enhanced 

by Suez Environnement acquiring SAUR’s 33% holding in Aguas de Valencia (see company entry in 

the 2007 Yearbook). 

Prior to the merger with Suez, Lyonnaise des Eaux had some 860 subsidiaries, reflecting the 

complexity of operating a utility via a large number of local contracts built up through contract awards 

and acquisitions. Compagnie Financiere Suez SA has been of more strategic importance with regard 

to power (Tractabel & Electrabel) and waste management (Watco) than the water markets. Some 

small contracts, supplying water to 300,000 people have been integrated into Suez’s portfolio of 

international contracts. The table below outlines Suez’s breakdown of the global population served 

and its main contract gains since 1984. 

Year Million Contract gains and acquisitions 

1984 33 0 France & Spain only 

1985 34 1 Macao 

1986 34 1 Natal (South Africa, O&M) 

1987 34 2 Warsaw (USA) 

1988 36 1 Essex & Suffolk Water Plc (UK) 

1989 36 2 Montecatini Terme (Italy) & Taiping, (Malaysia) 

1990 36 0 There were no contract gains this year 

1991 36 4 Fiestole (Italy), Gibraltar & Edmonton (Canada) 

1992 37 11 South Africa (O&M), USA, Italy, China & Malaysia 

1993 47 10 South Africa (O&M), USA, Argentina, Mexico, Germany & Malaysia 

1994 53 11 USA, Czech Republic, Mexico & Hungary 

1995 55 9 Czech Republic, Hungary, China, Brazil & Colombia 

1996 57 16 USA, Colombia, Northumbrian Water Plc (UK), Germany, Australia 

1997 82 17 USA, Bolivia, Colombia, Argentina, Morocco, Hungary, Turkey, 

China, Indonesia & Philippines 

1998 89 16 USA, Colombia, Uruguay, Germany, China, Indonesia & Australia 

1999 100 16 USA, Mexico, Chile, Germany, Norway, Slovakia & Italy 

2000 108 10+ United Water (USA), Chile, China, Cameroon, Brazil, Germany & 

Korea 

2001 110 5+ Korea, China, Chile, Ireland 

2002 131 25+ Taiwan, Canada, China, Mexico, Puerto Rico, Jordan, USA 

2003 121 3+ Italy 

2004 117 5+ Mexico, Russia, China 

2005 115 5+ Australia, Morocco, Algeria 

2006 110 4+ Saudi Arabia, China, Oman, Spain & USA 

2007 112 7+ China, Aguas de Barcelona (Spain), Egypt, India & USA 

2008 117 4+ Aguas de Valencia (Spain), Earth Tech (USA) 

International water and wastewater services accounted for 30% of consolidated water services 

turnover in 1994 and 1995, rising to 65% by 2001. International activities contributed at least 75% of 

the water services’ net earnings in recent years, but have fallen back since 2001 due to the Peso crisis 

and the divestment of various activities. In consequence, international activities accounted for 26% of 

water revenues in 2004. 

The 2005-12 development plan calls for ‘highly selective’ expansion outside its core markets, which 

are identified as Europe, the USA and China. 

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Suez, water and sewage services 

Service Measure 2005 2006 2007 

Water provided Million m 3 pa 4,218 4,406 5,036 

Sewage/effluent treatment Million m 3 pa (2 o / 3 o ) 2,153 2,271 2,603 

Water coverage Network Length (km) 175,419 178,678 197,555 

Sewerage coverage Network Length (km) 74,341 76,408 81,745 

Water facilities Number of treatment works 1,128 1,389 1,729 

Wastewater facilities Number of treatment works 1,452 1,4563 1,597 

The increase in 2007 reflects the acquisition of Bristol Water (c/o Agbar) and the Perth, Chongqing, 

Changsu and Algiers contracts entering service. 

Suez Environnement, segmental revenues, EBITDA & operating income 

Y/E 31/12 (EURmillion) 2005 2006 2007 

Revenues 

France 4,230 4,454 5,244 

Rest of Europe 4,224 4,556 5,022 

International [1] 2,638 2,437 1,738 

European Water Services 3,646 3,828 3,917 

European Waste Services 4,570 4,945 5,558 

International 2,957 2,750 2,645 

Other 45 37 36 

Intercompany -127 -113 -122 

Total 11,092 11,447 12,034 

EBITDA 

European Water Services 772 784 840 

European Waste Services 731 844 905 

International 434 402 395 

Other -25 -45 -36 

Total 1,912 1,985 2,104 

Operating income 

European Water Services 534 473 541 

European Waste Services 583 399 442 

International 198 298 259 

Other -41 -14 -52 

Total 1,274 1,155 1,189 

Aguas Andinas is consolidated within Agbar and thus is reported in Rest of Europe 

In 2004, the water and waste management activities were again regrouped into the current format. 

Ondeo Industrial Solutions (OIS) was incorporated into European Water Services in 2004. Lyonnaise 

des Eaux generated revenues of EUR2,630million in France during 2004. Degremont’s revenues in 

2004 were approximately EUR825million, and water revenues outside Europe accounted for 

approximately EUR1,500million in 2004. 

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Suez Environnement, water activity contributions to group turnover 

Y/E 31/12 (EURmillion) 2007 

Degremont 954 

- Design & Build 63% 

- Operating services 18% 

- Equipment 15% 

- BOT contracts 4% 

France 1,900 

- Drinking water production 49% 

- Wastewater collection & treatment 24% 

- Other services 15% 

- distribution plant & networks 12% 

Agbar 757 

- Spain 62% 

- Rest of the world 38% 

Germany 49 

Central & Eastern Europe 41 

USA 422 

- Regulated 62% 

- Unregulated 38% 

China 154 

Indonesia 72 

Morocco 461 

- Water 19% 

- Wastewater 5% 

Ondeo Industrial Services 145 

Safege 72 

2003 to 2007’s years of consolidation: activities ceased 

2003 Location Contract Population served 

Canada Halifax Wastewater O&M 380,000 

UK England Northumbrian Water Plc 6,296,000 

USA Atlanta Water O&M 2,000,000 

Vietnam Thu Duc Bulk water BOT 1,000,000 

Total 9,676,000 


Colombia Bogota Wastewater BOT 1,500,000 

Puerto Rico Puerto Rico Water & wastewater O&M 3,900,000 

Total 5,400,000 


Argentina Santa Fe Water & wastewater BOT 1,830,000 

Total 1,830,000 


Argentina Córdoba Water & wastewater BOT 1,270,000 

Argentina Buenos Aries Water & wastewater BOT 7,900,000 

Brazil Limeira Water & w’water concession 1,656,000 

Brazil Manuas Water & w’water concession 1,656,000 

Total 10,726,000 


Bolivia La Paz Water & wastewater BOT 1,400,000 

Philippines Manila Water & wastewater BOT 3,800,000 

Total 5,200,000 

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Overall, exit strategies have differed. The Halifax contract was handed back to the municipality and 

subsequently re-emerged in a different form, while in Puerto Rico and Atlanta the contract was 

terminated by mutual consent. The Vietnam contract ended after a perceived change in strategy by 

the Government. Suez sold its holding in Northumbrian Water (Ondeo Services UK) in two stages in 

order to deconsolidate NWL’s EUR3.1billion net debt and sold its activities in Brazil to a local investor. 

Bogota unilaterally ended the Saltire contract. Suez ended the La Paz/El Alto contract due to local 

political pressure, with the Buenos Aries and the Aguas de Santa Fe concessions being handed back 

while the Córdoba concession was sold to a local investor. Despite various problems, the Jakarta and 

Manila contracts continue to be operated by Suez, although they currently remain under active review. 

In Europe, the emphasis is currently on organic growth and gaining contracts in Central and Eastern 

Europe (where EU subsidies can be mobilised). The three priority markets in Central and Eastern 

European are the Czech Republic, Hungary and Slovakia. 

In September 2003, Suez Ondeo sold Ondeo Nalco to a US based consortium of the Blackstone 

Group, Apollo Management L.P., and Goldman Sachs Capital Partners for USD4.35billion. Nalco and 

Calgon were acquired for USD4,157million and USD406million respectively in 1999. 

The company’s Compass programme aims for organic revenue growth of 5% per annum between 

2008 and 2010 and 2% revenue growth through tuck-in acquisitions. EUR4.5billion has been 

apportioned for acquisitions, maintenance and development, including EUR600million for acquisitions 

in Water Europe and EUR700million for international acquisitions. 

Suez, populations served by country 


France 12,300,000 9,000,000 12,300,000 

Belgium 300,000 0 300,000 

Great Britain [1] 1,066,000 0 1,066,000 

Czech Republic 2,165,000 2,165,000 2,165,000 

Germany 272,000 642,000 642,000 

Hungary 2,255,000 255,000 2,255,000 

Ireland 0 220,000 220,000 

Italy 50,000 50,000 50,000 

Russian Federation 1,000,000 0 1,000,000 

Slovakia 150,000 150,000 150,000 

Slovenia 0 190,000 190,000 

Spain [1] 12,171,598 13,380,000 15,000,000 

Chile [1] 6,591,116 6,468,873 6,591,116 

Mexico 5,130,000 3,600,000 7,300,000 

United States 7,350,000 4,125,000 8,400,000 

Australia 3,300,000 75,000 3,360,000 

New Zealand 0 160,000 160,000 

China & Macao 14,700,000 1,000,000 14,700,000 

India 4,000,000 600,000 4,600,000 

Indonesia 3,500,000 0 3,500,000 

Malaysia 1,565,000 0 1,565,000 

South Korea 0 900,000 900,000 

Taiwan 3,000,000 0 3,000,000 

Jordan 0 2,200,000 2,200,000 

Morocco 3,800,000 1,300,000 3,800,000 

Algeria 6,500,000 3,500,000 6,500,000 

Qatar 0 700,000 700,000 

Oman 500,000 0 500,000 

Saudi Arabia 6,500,000 3,000,000 6,500,000 

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South Africa 330,000 0 330,000 

Turkey 535,000 535,000 535,000 

Total outside France 86,530,714 45,215,873 99,179,116 

Global total 99,030,714 54,215,873 111,479,116 


[1] Activities carried out by Agbar 

Alliances and JVs 

Ondeo-Lend-Lease Pty: Australian JV (with an unnamed third partner) formed in 1991. It is a 

marketing vehicle for gaining the bulk water supply contract for Greater Sydney in 1993. The JV has 

been extended into South East Asia. 

Sino French Holdings: A 50/50 JV with Hong Kong’s New World Development Corporation, a 

company that is also actively involved in waste management projects in Hong Kong. SFH is used for 

all of Suez’s contracts in China and Macao. 

TESCA: A JV with Bufete International and Bancomer serving Mexico. 

Ondeo and poverty reduction 

In 2003 Ondeo provided water to 46.5million people in developing economies, including 8.7million 

people below the poverty line worldwide. This includes 2.5million in South Africa, where they are within 

200 meters of a standpipe. 7million people have been connected to piped water supplies through 

service extensions by Suez. 

France 

SE’s Lyonnaise des Eaux France (LDEF) has been VE’s chief competitor in France (and globally) 

more or less since 1880. By 1958, Suez had 300,000 subscribers in France. The 1972 acquisition of 

Degrémont SA saw the company move from straightforward service provision to a more broadly based 

design, build, operate and transfer contract approach. Suez acquired SDI in 1991, gaining 3% of the 

French water market or some 1.5million people. By 2001, Suez provided 17million people with water 

(including some 3million in joint contracts with VE) and 9million with sewerage services, where it has 

since remained. The sewerage market is growing at an appreciably faster rate than the water market. 

In 1997, Suez acquired all the outstanding shares in Degrémont SA. 

Since the ending of Droit d’entrée in 1995, Suez has not made appreciable progress in gaining new 

contracts in France. At the same time, with two exceptions, no contracts of material significance have 

been lost. 

Recent contract gains include a 20 year wastewater treatment and recovery contract with Grasse 

(45,000) worth EUR124million signed in January 2008. 

SE believes that it currently serves 12.3million people in France (19% of the French population) and 

sewerage and wastewater treatment for 9million people (18% of the connected population). LDEF’s 

revenues for France were EUR1.9billion in 2007: 49% for drinking water distribution, 24% for 

wastewater, 15% on other services such as metering and 12% for network management. The 

company manages a total of 2,600 contracts with an average life of 8 years. Between 2002 and 2007, 

LDEF 82% of contracts in terms of contracts and 89% in terms of revenues. 

Spain 

Suez’s main involvement in Spain is through Agbar (see separate entry). In 2007, Suez, La Caixa, and 

HISUSA (51% Suez Environment, 49% Caixa Holding), which jointly owned 49.7% of Agbar, launched 

a public tender offer for Agbar’s outstanding shares. As of July 2008, Suez held 12% of Agbar directly 

and HISUSA held a further 64%, with Suez Environnement holding 45.9% of Agbar’s shares. SE 

currently uses Agbar to represent all of its water services interests in South America. 

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Degremont is active in developing desalination contracts in Spain and has built or gained orders for 34 

plants to date. 

2006 Barcelona 30 year concession 1,300,000, desalination 

2007 Muxtamel 5 year DBO 200,000, desalination 

The former is a EUR159million contract which will provide 200,000m 3 of water/day at a cost of 

EUR159million, entering service in 2009 and the latter is a EUR55million contract for two towns in 

Alicante, with an average production of 50,000 m 3 /day, rising to 80,000 m 3 /day in the tourist season. 

Degremont anticipated operating plants desalinating at least 2million m 3 /day of water worldwide by 

2009. 

In addition, SE acquired a 33% interest in Aguas de Valencia (AgVal) in October 2007. Aguas de 

Valencia provides water management for 3million people of the Valencia region. SE purchased this 

minority interest from SAUR for EUR135million. The majority shareholder of AVSA remains 

Inversiones Financieras Agval, a Spanish consortium formed by local shareholders, who hold 60.7% 

of the company. AgVal serves 1million people in Valencia (a 50 year contract renewed in 2001) and 

has a further 174 water and sewerage contracts in Spain. 

Belgium 

Suez’s Watco provides water to some 300,000 people in Belgium. Turnover rose from EUR29.6million 

in 1998 to EUR47.7million in 2000 before falling back to EUR40.5million in 2001. 

Italy 

Suez increased its stake in ACEA to 8.6% in October 2005, but as of July 2008, this was 5.0%. The 

Aqua Toscane and Arezzo contracts are held by Suez and the others outlined here by ACEA (see 

separate entry). 

1998 Aqua Toscane 30 year concession 50,000 water and sewerage 

Suez holds 100% of Aqua Toscane, which concentrates on water provision for Fiestole (contract 

started in 1991), Montecatini Terme (1989) and Ponte Buggianes (1992), Florence in Tuscany. 

1999 Arezzo 25 year concession 350,000 water and sewerage 

In January 1999, a Suez-led consortium gained the first international tender award for a water and 

sewerage concession following the belated liberalisation of the market in the wake of the 1994 Galli 

law. Suez’s consortium holds 46% of Nuove Acque, with 54% being held by public entities. The 

contract was formally signed in June 1999. The concession has a JV with the 37 communes involved. 

2003 Pisa ATO privatisation 800,000 water & wastewater 

A 45% stake in Acque SpA was acquired by the ACEA led consortium for EUR19.2million. Acque is 

Tuscany’s ATO-2, serving 57 communes. The concession will generate EUR1.2billion in revenues. 

2003 Siena/Grosetto ATO privatisation 350,000 water & wastewater 

A 40% equity stake in the Acquedotto de Fiora was acquired by the ACEA led consortium for 

EUR19.3million, with a concession life of 25 years. The ATO-6 covers 56 communes and required 

some EUR433million in capital spending. 

2003 Florence ATO privatisation 1,200,000 water & wastewater 

The ACEA led consortium has acquired 40% of Publiacqua SpA, the holder of the 20 year concession 

to operate water and wastewater services for 50 communes in Tuscany’s ATO-3. Publiacqua had a 

turnover of EUR104million in 2002 and net profits of EUR8million. The consortium is contributing 

EUR60million towards the EUR150million capital increase, with the municipalities paying the 

remaining EUR90million. In conjunction with the privatisation, EUR300million of Publiacqua’s 

revenues were securitised in order to pay for the capital increase and retire mature debt. 

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With ACEA and Ondeo controlling services for 2.7million out of the 3.5million people living in Tuscany, 

a rationalisation of these concessions is planned. 

Ireland 

2002 Cork 22 year BOT 220,000 wastewater treatment 

The EUR70million contract is part of a EUR270million drainage and effluent treatment scheme for the 

city, which is due to be completed in 2004. The STW will have a 270,000m 3 capacity with a PE of 

440,000, half being for industrial clients. 

Slovakia 

1999 Trencin 20 year lease 150,000 water & wastewater 

Suez’s TVS was awarded the concession for 50 local authorities in October 1999. The contract 

requires EUR40million in capex, including construction of a new sewage treatment works, with 

EUR5million pa in turnover at the outset. This is the first water services privatisation in the country. 

Slovenia 

1997 Maribor 25 year concession 190,000 wastewater treatment 

In February 1997 Suez became the preferred bidder for the Maribor concession. EUR30million 

investment is needed and the concession project will generate a turnover of EUR8million. There is an 

EBRD loan attached to the project. The population equivalent for the plant is 200,000 (equivalent to 

EUR29/capita pa). Maribor is Slovenia’s second largest city. Suez is the largest shareholder in the 

consortium (40% stake, including Degrémont as the constructor). Suez built a water treatment plant in 

Kopper in 1995. This was the first BOT wastewater treatment contract to be awarded in Central and 

Eastern Europe. 

Hungary 

With the gaining of the Budapest water provision contract, Suez’s total water services turnover in 

Hungary is now in excess of EUR85million pa. The contracts serving Pécs and Káposvár have a total 

turnover of EUR18million pa. Suez has set up a holding company for all its Hungarian water activities. 

1997 Budapest 25 year water distribution 2.2million water 

Suez and RWE Aqua controls all the shares of the management company and 25% of the equity of 

the asset management company. The management company formed by Suez (51%) and RWE Aqua 

(49%) has a 25% stake in Fövarosi Vizmuvek (FV) for USD82million. Suez thus holds 13% of the 

asset company. FV has a EUR65million turnover and employs 2,200 staff. The population currently 

served is 2.0million. 

2006 Budapest 4 years, DBO 1.5million wastewater 

In 2006 Degremont and Veolia, along with Hídépíto and Alterra, two local civil works companies, 

gained a EUR290million contract to build (EUR249million) and operate for four years (EUR40million) a 

350,000 m 3 /day wastewater treatment works (wet weather capacity 900,000 m 3 ) at Csepel to serve 

1.5million people in the Budapest area. The facility will enter service in 2010 and will be operated by 

them until 2014. 

1995 Pecs 25 year lease 180,000 water & sewerage 

Suez holds 48% of the operating company, with the municipality holding the remaining 52%. 

1995 Kaposvar 25 year lease 75,000 water & sewerage 

35% of the operating company’s equity is held by Suez, with the municipality holding the remaining 

65%. 

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Czech Republic 

1993 Brno (BVK) 25 year concession 420,000 water & sewerage 

1994 Ostrava 30 year concession 330,000 water & sewerage 

1996 South Moravia 25 year concession 350,000 water & sewerage 

Suez holds 46% of BVK, the operating company in Brno. The concession was extended for a 25 year 

period in October 1999 (starting from 2000). The new concession involves upgrading the wastewater 

treatment plant to meet the EU’s UWWTD criteria. 

1994 Karlovy Vary 25 year concession 180,925 water & sewerage 

Karloy Vary is based in North Moravia. Suez holds 49.8% of VAK, the operating company’s equity. Net 

profits increased from CZK26million in 2005 to CZK28million in 2006, with 15.205million m 3 of water 

provided in 2006, although water consumption fell from 101.7 to 99.6L/capita/day between 2005 and 

2006. 

1999 Ostrava area 15 year concession 0.75million water & sewerage 

AWG and Suez acquired approximately 76% of the equity of Severomoravske Vodovody a Kanalizace 

AS (SmVAK) from the municipalities and small shareholders in the region during 1999. Suez currently 

holds 50.07% of SmVAK. Revenues rose 3.8% to CZK828million in 2006, with a 2% increase in pretax 

profits to CZK62.5million. 

2000 Benesov 38,000 water & sewerage 

2000 Davle 37,000 water & sewerage 

2001 Sumperk Concession 120,000 water & wastewater 

82% of Sumperska Provozni Vodohospoda Ska Spole Nost (SPVS) has been acquired by Ondeo 

Services. SPVS serves 40 towns and districts in the North East with a total turnover of EUR6million 

pa. Ondeo serves 2.3million people in the Czech Republic and had a 2000 turnover of 

EUR138million. 

Russian Federation 

2004 Moscow 13 year BOOT 1million, water treatment 

EVN’s WTE awarded the BOOT contract to Degrémont in June 2004. The 275,000m 3 /day plant will 

provide potable water to South West Moscow from 2007 and be operated by Degrémont and WTE 

until 2017. 

Germany 

In Germany, Suez operates via Eurawasser. In 2002, Suez bought out Thyssen AG’s 51% stake in the 

JV. Eurawasser had a turnover of EUR75million in 2001 and serves 600,000 people. Revenues in 

2007 were EUR49million. 

2004 Cottbus 25 year partnership 147,000 water & sewerage 

Eurawasser acquired 28.9% of Lausitzer Wasser in February 2004. The town of Cottbus retains 50.1% 

of the company with the balance being held by local municipalities. Water will be supplied to 102,000 

people in Cottbus and 45,000 in surrounding areas, along with sewerage services for 117,000 people. 

Water revenues are EUR12million for water supply and EUR16million for wastewater pa. 

1992 Rostock 25 year concession 302,000 water & sewerage 

Rostock was the first major concession awarded to a private sector consortium in Germany. It forms 

part of the 1991 Baltic Action Plan for reducing effluent discharges into the Baltic Sea. Eurawasser’s 

work on the first phase of the Rostock wastewater treatment facility was completed for EUR130million 

in 1995. Total capital spending over the life of the contract will be approximately EUR460million. 

302,000 served for sewerage and 262,000 for water. 

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2000 N E Germany 25 year concession 70,000 water & wastewater 

2000 Gustrow 25 year BOT 35,000 wastewater 

The two contracts signed in April 2000 serve a total of 105,000 people in the Mecklenburg-Pomerania 

region of North East Germany. The concession contract is with an association of communes with 

70,000 inhabitants and involves the provision of 4million m 3 of water and the treatment of 1.3million m 3 

of wastewater pa. The Gustrow contract, signed in April 2000, is for the design, construction and 

management of a wastewater plant to treat 2.4million m 3 pa. 

1994 Goslar 25 year concession 55,000, sewerage 

Eurawasser has gained a 25 year sewerage contract for Goslar (Lower Saxony) from April 1996. 

Eurawasser controls a holding of 100% of the management and 49% of assets in terms of equity 

stakes. The facility will treat 98,000 people equivalents: 55,000 people, 43,000 for industry. 

2000 Kriensen, 25 year concession 12,000 water and sewerage 

In February 2000, a concession was signed for services to the city of Kriensen. 

2001 Schwerin Participation 100,000 water & sewerage 

Suez will participate in up to 49% of the water company following a two year transition period (called a 

‘silent participation’) in the city’s multi-utility. 

Great Britain 

Suez’s sold 72.5% of its 100% stake in Ondeo Services UK in May 2002 (see separate entry for 

Northumbrian Water). The remaining stake was sold to the Ontario Teacher’s Pension Plan for 

EUR377million in April 2005 for a capital gain of EUR260million. Bristol Water is owned via Agbar. 

Turkey 

1997 Antalya 10 year O&M 535,000 water & wastewater 

This is a delegated management contract for the Antalya Water and Sewerage Authority. Suez beat 

Thames, United Utilities/Bechtel and SAUR for the contract. ANTSU is a 50/50 joint stock company 

with ENKA. The contract involves customer billing and wastewater treatment. The city’s population is 

forecast to grow to 960,000 by 2005. 

Morocco 

1997 Casablanca 30 year management 3.8million water & sewerage 

Lyonnaise des Eaux de Casablanca (LYDEC) manages the Urban Community of Casablanca 

contract, covering 4.0million people. This represents 25% of the Moroccan market, with a 1,000km 2 

area and 23 urban communities covered. Ondeo Services will be responsible for water and sewerage 

and Elyo for electricity. 14% of LYDEC’s equity was sold on the Casablanca Bourse on 18 th July 2005, 

80% of the shares being bought by local investors. Suez continues to hold 51% of LYDEC (SE, 30%, 

GDF Suez, 21%), with the remaining 35% being held by Moroccan institutions. 

The water contract is worth MAD5billion (USD 517million) for the expansion and upgrading of water 

distribution and treatment. Between 1997 and 2007, the number of households connected to the water 

network rose from 440,000 to 700,000. The wastewater contract is worth MAD16billion 

(USD1.6billion). By the end of 2006, EUR560million had been invested in the various services. It 

involves the construction of three WWTWs, including recovery systems and the creation and extension 

of the sewerage network in development zones of western Casablanca. Currently, 5% of the 

population is connected to the sewerage network. Leakages of 25million m 3 pa have been dealt with 

since 1997, equivalent to 5% of water delivered. 

2000 Oum Er Rbia 30 year concession Bulk water provision 

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The bulk water supply concession for one third of Casablanca was awarded to Elyo and Ondeo 

Services. EUR30.5million will be spent on the rehabilitation and upgrading of bulk water supplies 

delivering 55million m 3 of water to the city, generating EUR305million over the concession’s life. 

2005 Marrakech 5 year DBO 1million, wastewater treatment 

The DBO calls for a wastewater treatment facility to enter service by the end of 2006. The facility will 

be funded by an EIB loan and Degremont will receive EUR9million for its role. 

Algeria 

2005 Taksebt 5 year DBO 2million, water treatment 

This is a 605,000m 3 /day water treatment facility, operated on behalf of SNC Lavalin. Construction of 

the facility started in May 2006 and will last for 37 months, and Degremont will gain EUR38million from 

the contract. 

2005 Athmania 5 year DBO 1million, water treatment 

This is a 262,500m 3 /day water treatment facility, operated on behalf of Algérienne des Eaux. The 

facility is due to enter service by 2007 and Degremont will gain EUR24million from the contract. 

2005 Algiers 5 year O&M 3.5million, water & wastewater 

The contract is initially worth EUR120million and can be extended into a larger project in 2010. The 

Algerian authorities are responsible for EUR200million pa in investment alongside the project for 

upgrading and extending the services of Société des Eaux et d'Assainissement d'Algers, with the aim 

of a 24hrs/day service by mid 2009. The contract formally started in April 2006. 

Oman 

2006 Oman Water & power IWPP 500,000, water desalination 

Barka 2 is the first private sector water and power facility in Oman. The 120,000m 3 per day facility 

contract was gained with Oman’s National Trading Company and Mubadala. 

Saudi Arabia 

In June 2002, Suez signed a contract with the Kingdom of Saudi Arabia to oversee a EUR10billion 10 

year investment programme for the development of water and wastewater in Mecca Province. Mecca 

Province has 7.5million inhabitants and three major urban areas: the Holy City, Jeddah and Taif. In 

Jeddah, the second largest city in the country (2.6million people) there is a chronic shortage of water 

resources and less than 20% of the city is equipped with a sewer system. 

2008 Jeddah 7 year O&M 3.0million, water & wastewater 

The 7 year USD61million contract started in September 2008, with the aim of bringing 24 hour water 

delivery, leakage reduction and to reduce sewage network overflows. The contract covers 5,300km of 

water distribution mains and 1,000km of sewerage networks. 

2007 Jubail 23 year BOOT 3.5million, water desalination 

In June 2007, financing was completed for the USD3.44billion required by the independent power and 

water project. 800,000m 3 /day of water will be desalinated. The Suez led consortium (Suez, GE and 

Hyundai Heavy Industries) holds 60% of the project equity, with 40% being held by Saudi Government 

institutions. 

Jordan 

2002 Northern Jordan 25 year BOT 2.2million, wastewater 

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The contract, announced in July 2002, is designed to bring new water resources into the north of the 

country. 60% of the USD154million capital spending will come from USAID as a grant. The Khirbet as- 

Samra treatment facility will replace an existing waste stabilisation pond treatment system, serving 

about 2.2million residents in Amman and surrounding towns. Construction started in December 2003 

with the consortium operating the plant for 22 years after it went into service in August 2008. The 

facility will handle an average of 267,000m 3 /day of wastewater and the contract will generate revenues 

of USD15million pa. Up to 100million m 3 pa of treated effluent will be made available for agricultural 

irrigation. Previously, there has been a management contract for water resources serving 2.5million 

people in the same area which started in 2000 and was handed back to the Government on its 

completion in 2006. 

Egypt 

2007 Cairo DBO 1.8million wastewater 

Degremont has worked with the 1.5million m 3 per day Gabal El Asfar wastewater treatment plant 

serving 9million people in Cairo since 2002. In 2007, it was awarded a EUR34million DBO contract to 

extend the plant by 300,000m 3 per day to serve a further 1.8million people. Degremont will also 

continue to serve the original facility from 2008-10 for EUR19.5million. Degremont has been active in 

Egypt since 1948 and its water treatment works serve 70% of Cairo’s 18million residents. 

Qatar 

2006 Lusail 10 year DBO 200,000 wastewater 

Degremont, along with Marubeni Corporation (Japan, pumping stations and conveyor/SCT) and 

Mushrif Trading and Construction Company (Qatar, civil engineering) will build a 60,000m 3 /day 

WWTW serving 200,000 people in the city of Lusail under a EUR143million contract. It includes 10km 

of sewage transfer systems and will cost USD123million to construct and generate USD65million in 

management fees. The contract was awarded in April 2006 and the facility will enter service during 

2007. 

2005 Doha 10 year DBO 500,000 wastewater 

A joint venture between Degremont and Marubeni was awarded a USD180million construction (50/50) 

and USD80million operation (70/30) contract for the 135,000m 3 /day facility in December 2005, which 

will enter service in 2008. 

UAE 

In March 2007, Suez signed a strategic partnership with Abu Dhabi’s Al Qudra Holdings for bidding for 

water and waste management projects in the region. 

2007 Dubai 10 year DBO To 900,000 wastewater reuse 

A USD800million DBO contract with Palm Utilities to design, build and operate a sewerage system 

and 220,000m 3 per day wastewater treatment and reuse facility serving the Jumeriah Golf Estates 

development in Dubai. This city is currently under development and has a planned population of 

900,000. Palm Utilities holds a 30 year water services concession for the city from its developer. 

Degremont will hold 54% of the project. 

Cameroon 

2000 SNEC 20 year concession 5.3million water provision 

A 51% stake in SNEC (Société National d'Eau du Cameroon) was acquired in May 2000 as part of a 

concession award. The contract includes the upgrading and rehabilitation of water distribution systems 

in a number of towns and cities, including Douala and Yaounde, which account for 43% of Cameroon’s 

population. Turnover will be EUR24million pa, with total investments of EUR300million. 

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North America 

United Water Resources (UWR) was founded in 1869 and was floated in 1986. In 1994 UWR merged 

with Suez’s General Waterworks Company, giving Suez a 30% holding in UWR. Until it was acquired 

by Suez, it was the second largest listed water services company in the US. Suez’s USA arm, 

Lyonnaise American Holdings acquired the remaining 67% of UWR’s equity that it did not hold in 2000 

and its 50% holding in United Water Services (UWS) for EUR1,108million. The company currently 

serves 7.3million people through its outsourcing activities and 25 regulated utilities in 21 states in the 

USA, and had a turnover of EUR499million in 2000 and EUR542million in 2001. In 2002, a 

USD46million water and sewerage contract was awarded by Laredo, Texas, covering 190,000 

customers or some 700,000 people. 

Acquisition of Earth Tech’s US O&M activities 

As part of the divestiture of Earth Tech’s water operations by AECOM, SE acquired 130 O&M 

contracts generating revenues of USD50million pa in the North East and Mid West regions of the USA. 

These contracts cover an estimated 1.0-1.2million people. 

1997 Franklin 20 year DBFO Water 

A 5million gallon per day water treatment plant was constructed by Earth Tech in 1997 at a cost of 

USD15million. The facility supplies water to the entire city. 

2001 Newport 20 year DBO Wastewater 

The contract involves constructing a 10.7million gallon per day wastewater facility for Rhode Island 

City and will generate USD68.9million in revenues. It is anticipated that the DBO will undercut original 

cost projections by 25% over its life. 

2003 New London 5 + 5 year O&M 45,000, water & wastewater 

The five year O&M contract for the city of New London, CT is worth USD4.4million and carries a five 

year renewal option. It covers the city’s water system (14,000 customers) and wastewater systems 

(6,000 customers). 

Including Earth Tech’s activities, UWR has water and wastewater outsourcing contracts covering 

7.5million people and water utilities serving 2.1million people. In total, these cover 8.4 million people. 

Current and recently gained activities (USDmillion pa, 2002-03) 

Regulated markets 360 

O&M outsourcing 175 

Consumer products 55 

Industrial clients 1,500 

Mexico 70 

UWR, regional breakdown of people served by regulated activities in 2008 

Arkansas 55,000 

Connecticut 17,500 

Delaware 109,000 

Delaware - Bethel 6,000 

Idaho 240,000 

New Jersey 753,000 

New Jersey - Hoboken 33,000 

New Jersey – Toms River 122,000 

New York 266,000 

New York - Westchester 44,000 

New York - New Rochelle 143,000 

Pennsylvania 175,000 

Rhode Island 19,500 

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Total utility operations 1,983,000 

In February 2007, United Water acquired the Aquarion Water Company of New York for USD28million, 

serving some 7,500 people with water services and 20,000 with wastewater treatment in three towns 

in the State of New York. This is now called United Water Westchester. In addition, approximately 

200,000 people are served by smaller owned activities in eight other states. New York South County, 

a regulated water supply company was acquired for USD3million in May 2004. 

UWS, non-regulated activities 

UWS was formed in 1997 through the merger of LDE/UWR and JMM-OSI. UWS has 145 contracts 

and currently serves some 6.5million people via a series of O&M contracts. 2001 turnover was 

USD174.8million. The Bechtel/United Utilities O&M outsourcing company US Water was acquired for 

USD40million in 2002. US Water gained its first water and wastewater operating contract in 1982 with 

the New Jersey Highway Authority. These activities are concentrated in Illinois, North Carolina, Rhode 

Island and New Jersey. The 1994 wastewater treatment contract with Indianapolis serving 800,000 

people was renewed in 2007 with the new contract running from 2008. In June 2007, UW acquired 

Aquarion Services (AOS), part of Kelda Group’s Aquarion. AOS managed Aquarion’s water 

outsourcing activities, covering 650,000 inhabitants in six States (Connecticut, Rhode Island, New 

Hampshire, Massachusetts, New York and California) through 82 subsidiaries and generating 

revenues of EUR24million in 2006 compared with USD19million in 2002. AOS’s largest contract, a 10 

year, USD110million contract to operate the wastewater treatment plant for the Water Pollution Control 

Authority in Bridgeport, Connecticut was gained in April 2003. 

The 1994 Indianapolis contract was renewed for 9 years from 2008 with an option for a further 11 

years. The new contract will be worth USD178million. The Jersey City contract was renewed for a 

further 10 years in 2008 in a contract worth EUR90million. The 227,000m 3 per day Gary sewerage and 

sewage treatment contract was extended for 5 years in June 2008, generating total revenues of 

USD54million. 

UWS, Main Contracts (net of AOS and Earth Tech) 

Location (state) Contract Water Sewerage Combined 

Allamuchy (NJ) O&M, WTW & WWTW 3,900 3,900 3,900 

Atlanta (GA) 20 Year O&M, WTW 1,500,000 0 1,500,000 

Avalon (CA) 5 Year O&M, WWTW 0 4,000 4,000 

Banning (CA) 5 Year O&M, WWTW 0 25,000 25,000 

Bedminster (NJ) 5 Year O&M, WW 0 7,100 7,100 

Big Canoe (GA) 5 Year O&M, WTW & WWTW 4,500 4,500 4,500 

Boone County (IA) 5 Year O&M, WW collection 0 4,500 4,500 

Burbank (CA) 5 Year O&M, WWTW 0 100,000 100,000 

Camden (NJ) 20 Year O&M, WTW & WWTW 87,500 87,500 87,500 

Cumberland (IA) 5 Year O&M, WWTW 0 6,000 6,000 

El Segundo (CA) 5 Year O&M, WWTW 0 150 150 

Freeport (IL) 5 Year O&M, WTW & WWTW 28,000 28,000 28,000 

Gary (IA) 10 Year O&M, WWTW 0 180,000 180,000 

Hoboken (NJ) 20 Year O&M, WTW 33,000 0 33,000 

Indianapolis (IA) 13 + 9 Year O&M, WWTW 0 800,000 800,000 

Jacksonville (FA) 20 Year O&M, WWTW N/A N/A N/A 

Jersey City (NJ) 8 Year O&M, WTW 239,000 0 239,000 

Killingly (CT) 5 Year O&M, WWTW 0 2,600 2,600 

Laredo (TX) 5 Year O&M, WTW & WWTW 700,000 700,000 700,000 

Manalapan (NJ) 20 Year O&M, WTW 1,000 0 1,000 

Manchester (NJ) O&M, WTW 19,100 0 19,100 

Milwaukee (WI) 10 Year O&M, WWTW 0 1,200,000 1,200,000 

North Adams (MA) 10 Year O&M, WTW 15,500 0 15,500 

Pekin (IL) 20 Year O&M, WWTW 0 34,600 34,600 

Phillipsburg (NJ) O&M, WWTW 0 31,450 31,450 

Pittsburgh (PA) O&M, W & WW 350,400 350,400 350,400 

Plainfield (IA) 20 Year O&M, WTW 25,000 0 25,000 

Rahway (NJ) 20 Year O&M WTW 26,500 26,500 26,500 

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Location (state) Contract Water Sewerage Combined 

Reidsville (NC) O&M, WTW 14,300 0 14,300 

San Antonio (TX) 10 Year O&M, WTW 250,000 0 250,000 

Springfield (MA) 20 Year O&M, WWTW 0 275,000 275,000 

Stonington (CT) 5 Year O&M, WTW 16,000 0 16,000 

Total 3,313,700 3,871,200 5,968,600 

Canada 

1998 Banff, Alberta 5 year O&M 7,600 sewage treatment 

One O&M contract, operated by UWS, the Halifax contract, gained in 2002 was rescinded in 2003. In 

June 2004, an EUR80million construction contract for Halifax was signed, with the municipality 

operating three wastewater treatment plants with a total capacity of 640,000m 3 per day which will 

enter service between 2006 and 2008. Degremont has been active in Canada since 1960 and has 

developed more than 500 water facilities there. 

Mexico 

Suez operates in Mexico through Bal-Ondeo, a 50:50 JV with Peñoles (BAL Group). In July 2002, 

Ondeo acquired Azurix’s Mexican operations through the JV for USD93million. The five contracts 

acquired bring Suez’s population served in Mexico to 7.3million along with USD70million pa in 

revenues. 

2004 San Luis Potosi 18 year BOT 400,000, sewage treatment 

This contract has a total value of EUR263million, with a two year construction and 18 year operational 

phases. 57% of the 80,000m 3 /day of wastewater will be subject to primary treatment and used as 

agricultural water. The other 43% will be subjected to tertiary treatment and used for cooling a power 

station. The contract was awarded to Degrémont, Sumitomo (Japan) and Prodin (Mexico) in June 

2004. 

1994 Mexico City 10 + 5 year O&M 2.6million water systems 

1999 Mexico City 5 + 5 year O&M 2.0million water systems 

In 1994, IACMEX was awarded a 10 year O&M contract for water metering, billing and collections and 

water mains maintenance for the central federal district of Mexico City. Azurix acquired a 49% holding 

in Industrias del Agua de la Cuidad de Mexico (IACMEX) from Severn Trent in 1999. This is for the 

development of metering and water supply systems, as well as making 330,000 new connections. In 

October 2004, these contracts were extended for a further five years, and will generate EUR80million 

in revenues over this period. 

1999 Puebla 20 year concession Sewage treatment 

2000 Culiacan 20 year concession Sewage treatment 

Ondeo Degrémont operates six sewage BOTs in Mexico, including the above contracts. The Puebla 

concession announced in October 1999 is for a sewage treatment works capable of handling 

360,000m 3 of effluents each day. The Culiacan facility is situated in Sinaloa state and has a capacity 

of 150,000m 3 /day. There are two other municipal BOTs serving Juarez and Torreon, and two industrial 

BOTs based in Santa Cruz and Altamira. 

1993 Cancun 30 year concession 520,000 water and sewerage 

The Cancun resort area has a population of 430,000, which had grown to 520,000 by 2002 and is 

forecast to grow at 3% pa to 2015. There are currently 78,000 connections. 4.3million tourists visit the 

resort each year. 65% of the concession’s revenues currently come from hotels (with US dollar 

denominated revenues), with 27% from residential water provision and 8% from wastewater. Azurix 

acquired its stake in the in Desarollos Hidraulicos de Cancun (DHC) concession in 1999. The 

concession generates revenues of USD50million pa and is profitable. 

There are also 3 BOT contracts previously operated by Azurix: 

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1999 León BOT 1.1million sewage treatment 

1999 Torreón BOT 1.0million sewage handling 

1999 Matamoros BOT Industrial sewage treatment 

South America 

With the exception of its investments in Chile, Suez completed its exit from water and waste 

management contracts in South America during 2006-07. Aguas de Barcelona and Degremont 

continue to be active in these markets. 

Argentina 

Aguas de Santa Fe was meant to be sold to Fides Group and Grupo Energia BV in 2005, but in May 

2005, Suez and Agbar decided to terminate the concession. 

The Aguas Cordobesa concession (Ondeo Services (39%), Agbar (17%) and five Argentinean 

companies) was sold to its local partners in December 2006. 

The Aguas Argentinas concession serving Buenos Aires was ended in March 2006. 

Bolivia 

Aguas de Illimani, serving La Paz & El Alto was handed to the Bolivian Government in January 2007. 

Brazil 

Suez’s interests in Brazil were transferred in 2006. 

Chile 

1999 Santiago Privatisation of EMOS 5.1million water & sewerage 

Suez and Agbar acquired 51% of Empressa Metropolitana de Obras Sanitarias (EMOS, now called 

Aguas Andinas), Santiago’s water supply company for a total of USD1,135million in 1999 and 2001. 

All 44 districts of the city are to be covered, along with the long-term development of its wastewater 

services. Aguas Andinas generated EUR215million in consolidated revenues for 2003. Revenues are 

expected to double in the next ten years because of wastewater expansion. Currently, 100% of the 

population is served with piped water and 97% by mains sewerage, while 75% of sewage effluents are 

treated. In July 2004, Agbar bought 30.1% of Suez’s holding in Inversiones Aguas Metropolitanas 

Limitada (IAM) for EUR139.4million. Suez and Agbar sold 43.4% of IAM shares on the Santiago Stock 

Exchange in November 2005 and now holds 14.3% of the company, 7.4% directly by Suez. 

2000 NE Santiago Aguas Cordillera 315,000 water & sewerage 

Enersis sold Aguas Cordillera to EMOS for USD193million in June 2000. The second highest bidder 

was Biwater at USD179million. Aguas Cordillera serves 88,000 customers in the Vitacura, Las Condes 

and Lo Barnechea districts of Santiago. 

Colombia 

In January 2004, the city of Bogota unilaterally ended the 1997 Saltire WWTW contract, which had 

served 1,500,000 people. 

China 

Suez has a total of 16 major contracts for rehabilitating and expanding current water treatment works. 

Suez now serves approximately 14.4million people in China via Sino-French Holdings (S-FH), which it 

operates jointly with New World Development Co. Ltd. of Hong Kong. Ondeo manages EUR704million 

pa of operations in China in 2007, up from EUR300million in 2000. In addition, Degrémont has 

completed 132 water and sewage treatment construction contracts in China, having been operating in 

China since 1975, and is responsible for 20% of China’s water and wastewater treatment facilities. 

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In April 2008, SE and New World announced they were contemplating strengthening their relations 

with their local partner in Chongqing, through the acquisition of a 15% interest in Chongqing Water 

Group for EUR140million. SE is already active in the city, which has a population of 32million. CWG 

operates 32 water treatment plants and 35 wastewater treatment plants in Chongqing by the end of 

2007, serving approximately 8.4million residents. CWG aims to provide quality services to the entire 

Chongqing as well as to expand to surrounding provinces in Western China. 

SE and New World are also expected to acquire Earth Tech’s Chinese contracts. See company entry 

on AECOM for details. 

Agbar also has activities in China which has established in November 2007 a JV with the Chinese 

company Golden State Water, to supply drinking water and treat wastewater in the province of 

Jiangsu. 

2008 Chongqing 25 year concession, S-FH 1.2million, water 

Construction of the first phase of the CNY1.5billion 600,000 m 3 per day project is due to begin in early 

2009. The contract was signed in September 2008. This is the first contract to derive from the April 

2004 Chongqing Waster Group agreement. At the same time, a concession contract was signed with 

CWG for water and wastewater services to the city’s Changshou Chemical Industry Park. 

2006 Changshu 30 year concession, S-FH 1.5million, water 

SFH will hold 49% of the equity of Changshu Water Supply Co. This covers the treatment and 

distribution of drinking water through three treatment plants with a total capacity of 675,000m 3 /day, 

and 2,500km of piping networks. The contract will generate revenues of approximately EUR30million 

pa through its operational life. 

2006 Chongqing 25 year concession, S-FH 1.0million, wastewater treatment 

A 50/50 joint venture contract between S-FH and the Water Company of Chongqing was signed in 

September 2006 for funding, developing and operating a 300,000m 3 /day wastewater treatment works 

serving the Jiang Bei and Yubei sectors of the city in Tangijatuo, building on Suez’s water treatment 

contract signed in 2002 and the agreement drawn up in November 2005 whereby S-FH is investing 

EUR60million into a joint venture company for the city. EUR60million will be spent on constructing the 

facility. In 2007 a further contract was signed, raising the capacity of the facility to 900,000m 3 /day. 

2004 Tianjin 35 year O&M, S-FH 0.85million bulk water supply 

The CNY470million (EUR57million) water treatment plant is to serve part of the city of Tianjin. The 

Tianjin Tanggu Sino-French Water Supply (S-FH) is a 50:50 joint venture between the city and S-FH. 

The facility will have a treatment capacity of 310,000m 3 /day. 

2002 Chongqing 50 year concession 1,000,000 water 

2002 Qingdao 25 year BOT 2,300,000 water 

Two WTWs in Chongqing are to be refurbished and expanded for a total cost of EUR150million. The 

two plants can handle 275,000m 3 /day of water and can be expanded by a further 100,000m 3 /day. 

Likewise, two WTWs in Qingdao are to be refurbished and expanded for a total cost of EUR430million. 

The two plants treat 540,000m 3 /day of water. 

2001 Panjin 30 year BOT 267,000 bulk water 

2001 Xinchang 30 year BOT 135,000 bulk water 

2004 Sanya 30 year O&M 300,000 water 

Suez and New World Group, via S-FH, operate three water treatment works in Hainan delivering a 

total of 230,000m 3 /day of water for EUR36million and managing them on behalf of the city. The 

system will be 50% held by S-FH and 50% by the municipality’s Hainan Tianya Water Industry Holding 

Co. The Sanya contract started in 2004. 

2000 Zhengzhou 30 year BMO, S-FH Bulk water supply 

2000 Baoding 20 year BMO, S-FH Bulk water supply 

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The contracts for Zhengzhou (Henan) and Baoding (Hebei) were announced in March 2000. They will 

serve a total of 1.7million people, with USD62million being spent on capital works for facilities 

delivering 560,000m 3 /day of water and generating a turnover of USD500million over the contracts’ life. 

1999 Changtu 30 year BMO, S-FH 0.3million bulk water supply 

1999 Wanzhou 30 year BMO, S-FH 0.5million bulk water supply 

1998 Zongshan 22 year BMO, S-FH 1.7million bulk water supply 

The contracts for the provinces of Changtu (Chongqing) and Wanzhou (Liaoning) were formally 

awarded in April 2000, and involve a total of USD35million in capital spending. These contracts will 

generate USD400million in turnover during their lives. Zongshan is in Guangdong province. The town 

and surrounding areas has 1.5million people. The contract is to seek to provide water by expanding 

the current capacity of the two extant plants from 0.7million m 3 /day to 0.78million m 3 /day. 66% of the 

Zongshan contract is held by Sino-French Holdings, with the remainder in municipal hands. Revenues 

are in the region of EUR15million pa. Degrémont carried out the engineering work and the extended 

facility entered service in 1999. 

1997 Lianjiang 30 year O&M, S-FH 0.3million bulk water supply 

Lianjiang is in Guangdong Province, with 1.3million inhabitants, 70% of whom are currently served 

with potable water. The project involves USD15million in capex for the upgraded potable water 

treatment plant, which is being built by Degrémont. 

1995 Chongqing 30 year BMO, S-FH 0.4million bulk water supply 

There is a USD25million build and manage contract in Sichuan province, based upon enlarging a 

water treatment facility that now supplies 20% of the city’s 2million population. 

1994 Guangzhou 30 year BMO, S-FH 0.9million bulk water supply 

The Guangzhou contract will account for 25% of the city’s current needs. 

1992 Tanzhou 35 year BOT, S-FH Bulk water supply 

1994 Gaozhou 30 year BOT, S-FH 170,000 bulk water supply 

1996 

Nanchang, 

Jiangxi 

28 year BOT, S-FH 0.9million bulk water supply 

1996 Macao 25 year concession 540,000 water supply 

This is a renewal of the SAAM contract awarded in 1988 for water provision to 540,000 people, 

including 140,000 customers. Suez/New World Holdings (NWH) holds 85% of the concession. 

255,000m 3 /day of water is provided. 

Taiwan 

2002 Kaohsiung 17 year BOT 3,000,000 water treatment 

Taiwan Water Supply Corporation awarded a reconstruction and O&M contract to Ondeo Degrémont 

and Ecotek, a subsidiary of China Steel, for the overhaul and operation of a drinking water plant in 

Kaohsiung. The contract is worth EUR200million, of which Ondeo Degrémont’s share is EUR90million 

or EUR6million pa over the 15 year O&M stage. The new facility will produce 450,000m 3 /day of 

drinking water by March 2004. 

Korea 

2000 Yangju 24 year BOT 100,000 sewage treatment 

Suez and Ondeo Degrémont (60%) and Hanwha (Korea, 40%) became the preferred bidder for a 

contract to design, build and manage three sewage plants for a total daily volume of 75,000m³ and an 

85km collecting network in the county of Yangju, in the province of Kyonggi. The population currently 

stands at 100,000 habitants but is predicted to reach 400,000 inhabitants in 2016 due to urban 

development. Turnover will be of EUR185million over the duration of the contract. 

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2001 Pusan 18 year BOT 800,000 sewage treatment 

The 135,000gal/day facility and 24km of collecting sewerage pipes will cost USD160million to build, 

with the contract generating USD490million over its lifetime. Ondeo holds 65% of the consortium, 

along with Samsung Engineering (20%) and Khumo Industrial (15%). Pusan has a total population of 

4million. 

India 

Degrémont has been present in India since 1954 and has designed, built and operated 130 drinking 

water and wastewater treatment plants including water works in Mumbai (11million people), Bangalore 

(1.5million people) and Delhi (3.5million people). In 2007, a strategic partnership with Mahindra 

Infrastructure Developer Ltd was signed for developing new projects in India. The 1,900,000m 3 per 

day Mumbai facility will be augmented by a 990,000m 3 per day EUR59million facility serving 4million 

people to be built under a 4 year DBO contract signed in January 2008. 

2007 Chennai 7 year O&M 4million, water treatment 

Construction of the 530,000m 3 /day of drinking water treatment plant for the Chennai Metro Water 

Supply and Sewerage Board started in July 2005 a total cost of EUR25.2million, financed with 

EUR6.6million from a French State protocol and EUR18.7million from the Tamil Nadu Urban Finance 

and Infrastructure Development Corporation. This is India’s largest water treatment works and the first 

to be fully operated by Suez. The operating contract runs from 2007-14. 

2008 Delhi 10 year DBO 600,000, wastewater treatment 

A 136,500m 3 per day plant will be will be built in a 30 month period and operated for 10 years by 

Degremont in a EUR27million contract. The treated effluent will be used for agricultural irrigation. 

Philippines 

Maynilad Water Services (MWSI) 

Maynilad Water Services, Inc. (MWSI) was awarded the western half of the Metro Manila (MWSS) 

water distribution concession in August 1997. On April 29, 2005, MWSI and its bank creditors, along 

with the MWSS executed a Debt Capital and Restructuring Agreement. As part of this, MWSS 

acquired 83.97% of the shares of MWSI, with Ondeo holding the remaining shares. In return, the 

creditors released it from loan obligations worth a total of USD220million. MWSS took over the 

operations of MWSI in January and sold to a consortium DM Consunji (see company entry) acquiring 

the shares in 2007. 

Indonesia 

1997 West Jakarta 25 year concession 3.5million water 

West Jakarta has an estimated 4.5million people in total. Suez owns 95% of the Jakarta concession’s 

equity. The initial investment period was extended from 5 to 10 years in 2000 so as to prevent price 

rises after a 24% tariff rise in 1999. 50% of residents are currently connected, it is predicted this will 

rise to 100% by 2022, with 80% paying. Jakarta’s population is expected to rise from 9.5million to 

12.5million by 2020, with the West Zone population rising to 6.7million. 

Rate adjustment negotiations resulted in an addendum to the concession agreement on December 24, 

2004, providing for an automatic half-yearly rate revision. PT PAM Lyonnaise Jaya was therefore able 

to obtain an 8.3% rate revision in January 2005 and another 9.5% revision in July 2005. In addition, 

PT PAM Lyonnaise Jaya’s USD denominated debt was refinanced in July 2005 through an 

IDR650billion bond issue of approximately USD67million. 

In July 2006, Suez sold 49% of its 100% stake in Pal Jaya retaining a 51% majority. PT Astratel 

Nusantra of Indonesia now owns 30% of PT PAM Lyonnaise Jaya’s equity, with the remaining 19% 

being held by Citigroup Financial Products Inc. 

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1997 Medan 25 year BOT 2.5million bulk water 

This is a USD85million BOT for drinking water supply plant for Medan. It is 85% held by Suez. There 

are currently 2.5million people in the city. The water supply for Phase 1 will be 170,000m 3 /day by 

2000, increasing to 260,000m 3 /day. Turnover will be USD2billion over the contract’s life, or 

USD80million pa. Medan’s population is expected to grow to over 8million by 2015 (currently, the city 

has a population of 2.5million). Suez has operated a water contract in the industrial zone of Cilegon, 

Java since 1993. 

Malaysia 

1993 Johor-Barhu 20 year BOT contract 715,000 water supply 

Johor-Barhu involves the lease of a water provision facility generating 0.63million m³/day of potable 

water. Suez holds 25.5% of the holding company Equiventures Sdn. Bhd., which is expected to seek a 

market listing in due course. 

1995 Kota-Kinabalu 20 year BOT contract 500,000 water supply 

In Kota Kinabalu (province of Sabah) a 20 year bulk supply concession for 0.24million m³day of water 

to 0.5million people was granted to Jetama Sdn. Bhd. 35% of which was held by Suez in 1995. 

1989/95 Taiping, Perak 20 year BOT contract 350,000 water supply 

In Perak, G.S.L. Water Sdn. Bht. (34.2% Suez) serves 0.35million people via a 20 year BOT contract 

signed in 1988 and started in 1989. The contract was extended when a 0.11million m³/day water 

treatment plant was commissioned in 1995. 

Australia 

1993 Sydney 25 year BOO 3.0million water treatment 

1996 Noosa 25 year BOT 45,000 wastewater 

Australian Water Services (AWS) is a JV between Suez and Lend Lease Pty formed by Suez in 1991. 

The Sydney water provision BOT signed in 1993 saw the USD200million facility enter service in 

October 1996, providing water for 80% of the city. AWS has now entered the 25 year operating 

concession phase, operating the facility’s 3,000ml/day capacity. A BOT concession for Noosa, 

Queensland was gained in 1996. Water revenues for Suez in Australia in 2004 were EUR30million 

and water and waste management revenues in 2006 were EUR346million. 

2006 Pimpama 25 year DBO 75,000 wastewater 

Pimpama is a wastewater treatment plant for the town near Brisbane, with a capacity of 17,000m 3 /day. 

2005 Perth 25 year DBO 250,000 water 

In April 2004, Perth’s Western Australia Water Corporation chose Degrémont and Multiplex 

Engineering to design, build and operate Perth's first reverse osmosis desalination plant. The 25-year 

contract for a 140,000m 3 /day facility represents total revenues of over EUR685million for Degremont, 

EUR85million in construction work and EUR600million for operating revenues. The facility entered 

service in April 2007. 

New Zealand 

Activities in New Zealand are carried out under New Zealand Water Services, an affiliate of Australian 

Water Services. Other projects include building the Auckland wastewater treatment plant, serving 

1.2million people from 2005. 

2002 Hutt Valley 20 year DBO 160,000 wastewater 

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Ondeo Industrial Services – Industrial water outsourcing 

Ondeo Industrial Services is part of SEIS (Suez Environment Industrial Solutions) for its industrial 

services activities. This has been developed along divisional lines: Elyo/Tractabel Industrial Solutions 

(energy), Ondeo Industrial Solutions (water and wastewater) and Sita One (Waste management). In 

2000, Suez had 60,000 water and wastewater customers, mainly for hardware or chemicals, with a 

20% share in this global market. Water customers include Yoplait, Pemex Salina Cruz (Mexico), IBM, 

BSN, Eridania Beghin Say, Coca-Cola (France, 1999) and Scottish Courage (1999). 

In 2001, BOC Gases, one of the world's largest producers of industrial natural gas, signed a five-year 

framework agreement with Ondeo Industrial Solutions. This contract covers water conveyance 

services and effluent treatment for eight BOC sites in England, Wales, and Scotland. 

Ondeo Industrial Solutions had a turnover of EUR157million in 2002, rising to EUR168million in 2003 

and EUR178million in 2004. OIS’s German activities were sold, in 2006 for EUR21million. Revenues 

were EUR145million in 2007, all in France, Italy, the United Kingdom, Spain and Benelux. OIS has 

200 contracts in Europe and has developed 1,800 process water and 2,000 wastewater treatment 

plants. 

Industrial contracts gained in 2001 (EURmillion pa) 

Client Country Activities 

Revenues Contract 

DB O&M duration 

Aticorta Italy WWTW 2.5 0.0 N/A 

Danone Vitapole Belgium WWTW 2.0 3.0 10 years 

Infineon Australia Process water 3.0 0.0 N/A 

ISI Pontelongo Italy WWTW 2.1 0.0 N/A 

Osram Germany Process W & WWTW 2.0 0.0 N/A 

SEPR Sant Gobain France WWTW 1.0 1.5 5 years 

Siemens Taiwan Process water 1.5 0.0 N/A 

Siemens Ireland Process water 1.5 0.0 N/A 

In 2002, Danone offered a series of five year integrated industrial services outsourcing contracts for all 

facilities covering dairy products, bottled water, biscuits and cereals. This covers the management of 

water, effluent waste and energy. The contract will have a turnover of EUR100-150million pa and 

seeks a 30% reduction in industrial water consumption from 2000 levels by 2010. 

A joint venture with Antwerpse Waterwerken (Brabo Industrial Water Solutions, BIWS) gained a 

EUR10million 10 year contract with Degussa’s Antwerp plant in November 2003. BIWS will manage 

the facility’s condensate treatment and supply it with demineralised water. Other contracts gained by 

Ondeo IS in 2003 included STMicroelectronics and Ascometal in France, Enichem in Italy, Siemens in 

Spain and M-Real in Germany. 

In February 2004, Ondeo gained a 20 year EUR120million water management contract for the BP 

Grangemouth complex in Scotland. This includes cooling water, process water and wastewater. Other 

clients in the UK include Chevron Texaco, Scottish Courage Brewing and Bairds Malt. OIS was 

awarded a EUR16million five year O&M contract with SEAGATE Technologies at Limavidy in Northern 

Ireland for the hard drive manufacturing facility’s water cycle in June 2006. 

In June 2005, Elyo gained a EUR143million 12 year contract to supply steam, compressed air and 

purified water to Goodyear Dunlop Tyres France. 400,000m 3 of water will be provided via reverse 

osmosis facilities. Elyo gained a EUR90million 13 year contract with SNPE’s Bergerac. This includes 

the provision of raw, filtered and flocculated water. 

Other contract gains (for water only) by OIS in 2005 included Autofina (EUR26million) and Arcelor 

Group (EUR10million), both in France. 

Suez gained a 20 year private-pubic partnership contract in May 2007 for water and wastewater 

treatment for Tolouse-Blagnac Airport. The contract involves EUR10million in capex and will 

incorporate a rainwater recovery and recycling facility designed to handle 700,000m 3 of surface run-off 

annually. 

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2002 Pudong, Shanghai 50 year water management Industrial water provision 

This contract is a 50:50 JV between Sino French Holdings and Shanghai Pudong Spark Development 

Zone United, providing 200,000m 3 /day of industrial water, serving the Shanghai Spark Industrial Zone 

(40,000 customers). The contract is worth EUR600million and is the first industrial water contract in 

China. The contract also caters for the treatment of 45,000m 3 /day of effluent via a new EUR50million 

facility and may be extended to cover the entire water cycle. The Shanghai Chemical Industrial Park 

includes BP, BASF, Bayer, Huntsman and China’s Gao Qiao. In 2002, Ondeo Nalco gained an eight 

year contract for oil and water treatment service from Suncor Energy, a company specialising in crude 

oil extraction from oil sands deposits in north-eastern Alberta, Canada. The deal is worth 

USD10million in revenues. 


Name: Suez Environnement SA 

Address: 16 Rue de la Ville l’Eveque, 

75008 Paris, France 

Tel: +331 40 06 64 00 

Fax: +331 40 06 66 44 

Web: www.suez-environnement.com 

Web: www.lyonnaise-des-eaux.fr 

Web: www.unitedwater.com 

Gerard Mestrallet (Chairman, Suez Environnement & GDF Suez) 

Gerard Lamarche (Chief Finance Officer) 

Jean-Louis Chaussade (CEO, Suez Environnment) 

Bernard Guirkinger (Water Europe) 

219 


PART 3(i): COMPANY ANALYSIS MAJOR PLAYERS - VEOLIA 

FRANCE 

VEOLIA ENVIRONNEMENT SA 

Compagnie Générale des Eaux was renamed Vivendi in May 1998, while retaining its former name for 

water and wastewater activities. In July 2000, Vivendi Universal sold 28% of its holding in Vivendi 

Environnement (VE) via a listing on the Paris Bourse and a further 9% in 2001. Vivendi has in turn 

been renamed Vivendi Universal (VU) and is concentrating upon the telecommunications and media 

sectors. Following VU’s financial problems in 2002, the company sold a further 43% of VE’s equity to a 

series of French institutions and as a result, VE’s results (and debt) are no longer consolidated into 

VU’s. VE has been renamed Veolia Environnement (VE) so as to differentiate between the two 

companies. Water activities were grouped under Veolia Water. After a further sale in December 2004, 

VU’s share of VE fell to 5.3% and was fully divested in 2006. In 2004, after a recapitalisation exercise, 

the Générale des Eaux name was revived to become the holding company for Veolia Water’s French 

activities. 

Veolia Environnement, profit and loss account 

Y/E 31/12 (EURmillion) 2003 2004 2005 2006 2007 

Turnover 28,063.0 22,500.3 25,570.4 28,620.4 32,628.2 

Operating profit -766.9 1,480.6 1,892.9 2,132.9 2,496.9 

Net profit -2,054.7 391.5 622.2 758.7 927.9 

Earnings/share (EUR) -5.13 0.99 1.59 1.89 2.13 

Dividend/share (EUR) 0.55 0.68 0.85 1.05 1.21 


Turnover 9,585* 9,805 9,134** 10,088 10,928 

Operating profit 743* 800 1,002** 1,161 1,268 

* 2003 figures are pro forma 

** 2005 include VE’s share in Proactiva 

Veolia Water has three segments: Veolia Water Operations (municipal and industrial management 

contracts, 2005 revenues of EUR6.4billion), Veolia Water Solutions & Technologies (design & build 

contracts and service solutions for municipal and industrial contracts, 2005 revenues of EUR1.6billion, 

growing to EUR1.8billion in 2006, with EUR2.2billion in orders gained in 2006 against EUR1.6billion in 

2005) and Sade (construction, 2005 revenues of EUR1.0billion). 

Veolia Water Solutions & Technologies saw its revenues rise by 12.8% to EUR1,881million in 2007. 

Globally, Veolia Water (Veolia Eau) has 4,400 contracts and operates in 60 countries. 

VWS, 2005 revenue breakdown, 2005 

Municipal 55% Municipal D&B 47% 

Industrial waste water 26% Municipal solutions 8% 

Industrial process water 19% Industrial D&B 12% 

Industrial solutions 33% 

Générale des Eaux (GDE) was founded in 1853 and started the privatisation of France’s water sector 

by winning a concession for water supply to Lyon in that year, subsequently to Nantes (1854), Nice 

(1864) and gaining the first of a series of concessions serving Paris in 1860. In 1884 GDE secured the 

first wastewater treatment concession, serving the Reims municipality and pioneering the use of ozone 

to sterilise water at Nice in 1909. VE is also a pioneer in the development of the international water 

market. Its subsidiary Compagnie des Eaux pour l’Etranger (CEE) was set up in 1879 for international 

water contracts. CEE took over the water supply concession for Venice in 1880 and further contracts 

were gained in Verona, Bergamo, La Spezia and Naples. The company set up Compagnie des Eaux 

de Constantinople for water supply to Istanbul in 1879, and in 1882, CEE gained the water supply 

concession for Lausanne in Switzerland and Oporto in Portugal. After the 

First World War, VE decided to restrict its contracts to France. As a result, contracts were either 

wound up or nationalised during the inter-war years. 

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VE developed its presence in water engineering through the acquisition of SADE in 1918 and Tuyaux 

Bonna in 1924. Since the 1930s, the French water sector has gradually been privatised with VE being 

the dominant player in the market. From 1967 onwards, VE has diversified, first into waste 

management, then energy and more recently into construction, property and media and 

telecommunications. 

VE entered the Spanish water market in competition with FCC and Aguas de Barcelona. Professional 

Services Group of the USA was acquired in 1981 to address the American market and General 

Utilities Plc was set up in 1986 in anticipation of the privatisation of Britain’s water services. Since 

1992, the company has been gaining water and sewerage concessions on a global basis. By 1995, 

VE had 2,300 operating contracts serving 4,000municipalities in France. VE reduced the number of 

subsidiaries in France from 40 to one. The company’s domestic market strength has meant that until 

recently, it could take a more relaxed attitude towards the international water markets than Suez. 

Approximate breakdown of water revenues by region 

EURmillion 2003 2004 2005 2006 2007 

France 6,116 4,205 4,459 4,802 4,927 

UK 454 413 464 552 573 

Germany 708 766 1,205 1,283 1,277 

Rest of Europe 900 953 1,111 1,279 1,413 

USA 1,893 497 582 641 539 

Rest of Americas 315 105 92 122 148 

Africa and Middle East 621 629 609 705 1,017 

Asia 391 355 434 579 733 

Australia and New Zealand N/A 77 101 124 300 

Total 11,340 7,977 9,134 10,088 10,927 

The decrease in revenues between 2002 and 2004 primarily reflects the selling off of the engineering 

activities associated with USFilter since 2002 and the sale of the stake in FCC during 2004, with the 

resultant deconsolidation of the Proactiva activities. 

VE – Highlights 

1853: Compagnie Générale des Eaux (GDE) wins concession for water supply to Lyons 

1880-82: Water supply concessions to Venice and other cities 

1884: Wastewater treatment concession for Reims 

1967: Waste-to-energy projects 

1972: Water activities in Spain 

1980: Acquires CGEA (waste management and transport) 

1981: Acquires Professional Services Group of the USA 

1986: General Utilities Plc formed for UK operations 

1987: Licence for France’s second cellular telecoms system 

1987-88: Acquires construction and property companies 

1993: Buys out Eau et Ozone 

1995: GDE’s first loss – due to property & construction 

1998: Générale des Eaux renamed Vivendi 

1999: Acquires US Filter and Berliner Wasser, formation of Vivendi Water 

2000: Partial flotation of Vivendi Environnement (VE) from Veolia Universal 

2002: Deconsolidation of VE and VU 

2003: VE renamed Veolia Environnement, sale of Everpure 

2004: Sale of VE’s stake in FCC, sale of US Filter & Culligan, VU’s holding falls to 5% 

2005: Acquisition of companies in Italy and Germany 

2006: VU’s last stake sold, Southern Water sold, United Water JV bought 

2007: Desalination contracts in Saudi Arabia, Oman and Australia 

2008: Strategic acquisitions in Japan 

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Water activities (excluding Proactiva) 

VE: overall water and wastewater activities 2003 2004 2005 2006 2007 

Treatment efficiency of wastewater treatment plants 92% 93% 91% 90% 90% 

Water provided (million m 3 /pa) 6,112 6,270 N/A N/A N/A 

Industrial provided (million m 3 /pa) 217 226 190 369 453 

Customers equipped with a water meter 91% 91% 93% 93% 95% 

Efficiency of water systems – Worldwide 77% 77% 77% 78% 75% 

Efficiency of water systems – Europe (EU 15) 80% 81% 80% 81% 82% 

Water efficiency in Europe in 2003 for its ongoing activities was 83% in 2003. The difference is 

accounted for by newly acquired concessions operating more run down water assets. Likewise, 

worldwide water efficiency in 2007 was 79% net of a new contract serving 1.5million with an efficiency 

of 15%. 

Population served in each country 


Europe 

France 24,500,000 16,200,000 24,100,000 

Armenia 1,200,000 1,000,000 1,000,000 

Belgium 0 1,100,000 1,100,000 

Czech Republic 4,288,000 4,148,000 4,288,000 

Denmark 83,000 0 83,000 

Germany 4,950,000 5,030,000 5,050,000 

Great Britain 3,313,000 585,000 3,898,000 

Ireland 0 120,000 120,000 

Hungary 268,000 2,222,000 2,222,000 

Italy 1,396,000 2,080,000 2,096,000 

Malta 290,000 290,000 290,000 

Netherlands 0 1,700,000 1,700,000 

Poland 80,000 70,000 80,000 

Portugal 185,000 275,000 275,000 

Romania 2,050,000 0 2,050,000 

Slovak Republic 950,000 950,000 950,000 

Sweden 50,000 50,000 50,000 

Argentina * 45,000 45,000 45,000 

Canada 127,000 238,000 331,000 

Colombia * 2,495,000 287,000 2,495,000 

Mexico 5,980,000 3,450,000 5,980,000 

USA 7,000,000 6,000,000 14,000,000 

Australia 2,829,000 1,226,000 2,955,000 

China 30,710,000 9,230,000 35,050,000 

Indonesia 100,000 0 100,000 

New Zealand 25,000 251,000 251,000 

Philippines 10,000 0 10,000 

South Korea 0 410,000 410,000 

Gabon 607,000 0 607,000 

Israel 1,400,000 0 1,400,000 

Morocco 2,900,000 2,200,000 2,900,000 

Niger 600,000 0 600,000 

Oman 350,000 700,000 1,050,000 

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UAE 130,000 1,435,000 1,735,000 

Total outside France 74,411,000 45,092,000 95,171,000 

Global total 98,911,000 61,292,000 119,271,000 


Europe 

France 24,500,000 16,200,000 24,100,000 

Global total 112,710,000 66,547,000 130,924,000 

* Proactiva activities 

People served via Berlinwasser International have not been included. These can be found in the RWE 

entry. 

The number served in France has remained effectively constant in recent years, net of re-statements 

for cross shareholdings with Suez Environnement. The table also excludes VE’s continuing activities in 

Spain. 

Stake divestments 

Approximately USD390million has been raised since 2001 through the selling off of non-strategic 

minority stakes in asset owning water companies in England and the USA. In the former case, this is 

also related to preparing for VE’s blocked bid for Southern Water (First Aqua). 

Company Country Holding % Date Value (million) 

Bristol Water UK 25 March 2002 GBP23 

Mid Kent UK 21 April 2001 GBP22 

South Staffordshire Group UK 32 October 2002 GBP85 

Philadelphia Suburban USA 17 September 2002 USD200 

Southern Water UK 25 April 2006 EUR89 

In addition, some USD3,193million has been raised from the sale of peripheral activities in the US 

Filter group since 2001. Purchasers have been a combination of companies active in water systems 

engineering and private equity houses. 

Division Vendor Date USDmillion 

Surface Preparation International Surface Preparation July 2003 130 

Waterworks distribution JP Morgan/TH Lee Partners September 2002 620 

Plymouth Products Pentair September 2002 125 

Filtration and Separation Pall February 2002 360 

Johnson Screens Weatherford International October 2001 140 

Culligan Clayton, Dubilier & Rice June 2004 610 

Everpure Pentair December 2003 215 

Systems & Services Siemens May 2004 993 

These sales involved a total write-down of USD4.5million between 2000 and 2004. VE’s water 

revenues in the USA will be USD700million pa post these divestments. 

International alliances and JVs 

OMSA: A JV in Mexico with ICA, serving 7.8million people in the country. 

Proactiva: Proactiva Medio Ambiente is a 50:50 JV between VE and FCC for all water and waste 

management contracts in Latin America. It is still being used post the FCC stake sale. 

RWE/Berliner Wasser Betriebe: A joint bid gained the Budapest sewerage concession in 1997. 

Since 2000, it has been used on a number of occasions. 

China: VE has a number of local partners in China. Major contracts have recently been gained with 

Citic Pacific and Beijing Capital Group. 

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EBRD investment: In 2007, the EBRD (European Bank for Reconstruction and Development) 

invested EUR90million to acquire 10% of Veolia Voda, which while active in Central and Eastern 

Europe is primarily VE’s vehicle for the Russian Federation and the Ukraine. 

IFC investment: In 2007, the International Finance Company (IFC) and France’s Société de 

Promotion et de Participation pour la Coopération Economique (PROPARCO) acquired 19.45% in 

Veolia Water AMI, the holding company for VE’s water activities in Africa, the Middle East and the 

Indian sub-continent. 

MENA joint venture: A JV between VE (51%) and Mubadala Development Company (49%) was 

formed in October 2008 to develop water & wastewatwer contracts in the MENA region. MDC is 

owned by the Government of the Emirate of Abu Dhabi and has a series of investments designed to 

diversity the Emirate’s economy. 

France 

Générale des Eaux started operating in France in 1853. By 1953, the company provided water to 

8million people and by 1980, it provided water to 19.8million people and sewerage to 6.9million. In 

2006, the figure was 24.5million water customers and 16.2million sewerage and sewage treatment 

customers. The numbers served has fallen from 26million and 17million respectively in 2004 due to 

joint contracts with Suez being broken up. VE has retained the Générale des Eaux name for its 

operations in France, which currently has 4,000 contracts with 8,000municipalities in France. The 

sewerage market is seen as growing at an appreciably faster rate than the water market, because of 

the low penetration of sewerage networks and sewage treatment in France in the wake of compliance 

work for the EU’s Urban Waste Water Treatment Directive. 

In France, the company has to concentrate on consolidating its water contracts in an unprecedented 

competitive and critical atmosphere. As part of the company’s responses to these challenges, 

customer service charters for 10million people were issued by the end of 1996, with all customers in 

France being covered by 1999. 

Générale des Eaux: 2001 2002 2003 2004 2005 

Contract renewal rate 77% 92% 80% >90% >90% 

New contracts gained in each year have at least cancelled out contract losses in each of these years. 

For example, 53 contracts were lost in 2003, but 35 new contracts were gained. The average waited 

time before the expiration of long term contracts is 12 years. Total revenues for contracts renewed in 

2006 are EUR955million, including an 18 year water and wastewater contract for Narbonne 

(EUR170million), a 12 year water provision contract for Saint Omer (EUR26million) and a wastewater 

treatment contract gain in Angers Loire (five years, EUR21million). Total revenues for contracts 

renewed in 2007 were EUR920million, including the community of Nice Côte d’Azur area (12 years, 

EUR75million), the city of Beauvais (12 years, EUR38million) and the city of Macon (10 years, 

EUR59million). In the first half of 2008, 77 contracts were renewed (40 for water and 37 for 

wastewater) including a 18 year EUR242million water contract for the Clergy Pontoise area. 

Denmark 

Along with one long standing contract for water provision to 60,000 people via VE’s I Krüger AS, VE 

gained the first wastewater management contract in Denmark in February 2006. 

2006 Allerød 8 year management 23,000 sewage treatment 

The contract covers managing three WWTWs, the sewerage system and overhauling the 

municipality’s sludge recycling system for agricultural application. 

The Netherlands 

2002 Delftland 30 year DBFO 1,700,000 sewage treatment 

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The EUR1.5billion contract was won by the Delfluent Consortium, led by VE (40%); two Dutch publicly 

owned water distribution companies, Delta Water (20%) and Waterbedrijf Europoort (20%), Rabobank 

(10%), Heijmans Beton-en Waterbouw (5%) and Strukton (5%). The contract started in 2003 and 

involves operating the working plant at Houtrust (0.4million PE) and developing the new 

EUR258million 118million m 3 pa plant at Harnaschpolder (1.3million PE) both entering service in 

March 2007. VE (50%) is leading a JV, along with Delta Water (25%) and Waterbedrijf Europoort 

(25%) for operating the facilities and 90km of sewerage network. Delftland serves The Hague and 

surrounding areas. 

Spain: FCC 

FCC is a Spanish construction and utility company, which dominates the municipal waste collection 

market. In October 1998, VE acquired 49% of B1998, the holding company for the Koplowitz sisters’ 

interests in FCC, which in turn holds 56.5% of the company. In July 2004, Veolia sold its 49% stake in 

B1998 to a company controlled by Mrs. Esther Koplowitz. The transaction reduced Veolia 

Environnement's net indebtedness by EUR1.1billion, with a total cash payment to Veolia 

Environnement of EUR916million. Veolia Environnement acquired its stake in FCC from Vivendi in 

2000 for a total consideration of EUR691million. VE has retained Gruppo General des Aguas (water 

and sewerage) which in 1997 served 3million people in Spain and had net sales of PTA1billion. The 

Proactiva joint venture in Latin America is to continue for the time being. 

2007 Campo Dailas 17 year BOT water desalination 

In May 2007, VE gained a EUR128million (EUR78million to VE) desalination contract in southern 

Spain, with an 18 month construction and 15 year operation period. 

Portugal 

275,000 people (113,000 customers) were served in 2007, generating revenues of EUR29.8million. 

1995 Mafra 25 year concession 45,000 water & sewerage 

This is VE’s first contract in Portugal. The 25 year water provision concession has sales of 

FRF25million pa (45,000 people, 22,000 subscribers) and will be extended to wastewater. This award 

has been seen as somewhat contentious, because it has been alleged that this contract has been set 

up as a loss leader by VE with its water fee tender of EUR0.46/m³, compared with the current price of 

EUR0.65/m³ and Agbar’s tender of EUR0.48/m³. The municipality intends to invest EUR200-250million 

on improved sewerage systems over the length of the contract. 

1995 Ourem 31 year concession 40,000 sewerage 

The concession to serve Ourem (110km north of Lisbon, and 80km from Mafra) was gained in April 

1995 (40,000 people, via 15,000 connections), with a turnover of EUR1.8million pa. 

1996 Frielas 30 year concession 70,000 PE sewerage 

In Frielas, a suburb of north Lisbon, VE is involved in the construction of a wastewater treatment plant. 

Construction started in March 1996 for a EUR43million facility. This was completed at the end of 1998 

and serves the equivalent of 70,000 people through a concession contract. 

2000 Valongo 30 year concession 80,000 PE water and wastewater 

VE was awarded the concession in July 2000 with a turnover of EUR7million pa. Valongo is 20km east 

of Porto. This contract operates 2 wastewater treatment plants, 200km wastewater collectors and a 

480km water network. Aguas de Valongo serves 31,000 subscribers. 

2001 Paredes 35 year concession 60,000 PE water & wastewater 

VE was awarded the concession in January 2001 with a turnover of EUR4million for 2002, rising to 

EUR7million pa. Paredes is 40km east of Porto. This contract operates one wastewater treatment 

plant, 80km wastewater collectors and a 100km water network. SBPAR serves 5,000 subscribers. 

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The Czech Republic 

Veolia Voda (www.veoliavoda.cz) serves 4.3million people in 1,200 municipalities, along with 15 

industrial water outsourcing contracts. Revenues in 2005 were CZK11billion. In 2002, VE acquired 

Bouygues’ 50% holding in their CTSE JV. 

2006 Prostejov 25 year management 70,000 water & sewerage 

VE will manage the Prostejov Water Company’s facilities in the Moravian Region and the contract will 

generate EUR139million. 

2006 Slany 15 year management 21,000 water & sewerage 

This contract is adjacent to the Kladno-Melnik contract area. Total revenues will be EUR30million. 

2005 Hradec Karlove 30 year concession 149,000 water & sewerage 

The contract covers 100,000 people in Hradec Kralove, Eastern Bohemia’s regional capital and 

50,000 in 100 other municipalities in the region. The contract will generate revenues of EUR525million. 

Kralovehradecka Provozni AS had revenues of CZK534million in 2006. 

2004 Kladno-Melnik 20 year concession 331,000 water & sewerage 

Revenues for the contract will be worth EUR600million. Stredoceské Vodárny AS generated revenues 

of CZK614million in 2006. 

2004 Eastern Moravia 30 year concession 157,000 water & sewerage 

In June 2004 Veolia signed a 30 year contract with Vodovbody a Kanalizace Zlin (VAK Zlin) the water 

public authority for the eastern part of Moravia in the Czech Republic. The area includes 80 districts. 

The contract will generate total revenues of around EUR360million. Revenues in 2006 were 

CZK374million. 

1996 Pilsen 12 + 10 year concession 230,000 water & sewerage 

1996 Sokolov 10 + 16 year concession 130,000 water & sewerage 

1999 Aqua Pibram 10 + 10 year concession 80,600 water & sewerage 

Vodarenska and Kanalizanci AS Plzen (VP) serves the city of Pilsen on a lease with O&M work. The 

contract is currently for water provision (230,000 people) plus wastewater (180,000 people), the latter 

through a new sewage treatment facility opened in 1997. Industrial and domestic customers pay an 

equal amount for water and prices are below that seen in most of the Czech Republic. During 1997, 

the contract was extended to cover a further 72,000 people in the northern part of Pilsen. Allied with 

the sewerage expansion, this boosted 1998 turnover to CZK700million which was steady at 

CZK737million in 2006. In 2000, the Pilsen contract was granted a 10 year extension to 2017. In 2004, 

VP extended its service areas in the two latter districts with the municipalities of Štenovice, Cizcice 

and Ejpovice. 

The Aqua Pibram concession was gained in December 1999. Aqua Pibran was renamed 1.ScV AS 

after the merger with VAK Ricany u Prahy, s.r.o., which added 4,600 people. 1.ScV had revenues of 

CZK274million in 2006., while the Sokolov contract gained a 16 year extension. The Aqua Pibram 

concession contract was extended by 10 years in 2003, with revenues of EUR4million pa. 

1998 Northern Bohemia 15 year concession (1995) 1,238,000 water & sewerage 

Hyder’s stake was sold for CZK795million (USD26.7million) to VE, giving the company 43.17% of 

Severomoravske Vodovy a Kanalizace Ostrava (ScVK), with Severoceske Vodarensky Svaz (SVS), 

formed by the client towns, holding a further 34.7%. At the start, 1.07million of the inhabitants were 

connected to the mains water supply and 0.87million to the sewerage network. ScVK’s turnover to 

March 1999 was CZK1.1billion and rose to CZK5.53billion in 2006. 

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1999 Ceske Budejovice 10 + 10 year concession 200,000 water & sewerage 

1999 V Klatovy 10 year concession 50,000 water & sewerage 

1999 3 towns 10 year concession 26,000 water & sewerage 

The Ceske contract is operated by 1.JVS, a joint venture originally between VE and SAUR, which VE 

subsequently took full control of. The original concession was granted a 10 year extension in 2000 to 

2018. Revenues in 2006 were CZK691million. The Vodosopol Klatovy concession is incorporated 

within 1.JVS and was acquired in December 1999, along with the privatisation award for the towns of 

Susice (12,000), Stary Plznec (6,000) and Stod (6,000). 

2000 Olomouc 20 year concession 140,000 water 

This concession was awarded to Stredomoravaska Vodarenska AS (SMV) in March 2000. It is the first 

PSP contract in the region. Total net sales for the contract will be EUR200million. 2006 revenues were 

CZK395million. 

2001 Prague 28 year concession 1,465,000 water & wastewater 

VE and AWG paid EUR174million for a 66% stake in PVK, and VE subsequently bought out AWG’s 

stake. In 2002, the remaining 34% of shares were acquired from the municipality. The 13 year 

concession will generate EUR60million in 2001 and EUR120million in subsequent years. The contract 

will concentrate on service quality improvement and upgrading water and sewage treatment to EU 

standards. The concession was extended to 28 years in 2002. Leakage was reduced from 47% in 

2001 to 23% by 2006. Revenues in 2006 were CZK4.6billion. 

Slovakia 

These contracts, awarded in May 2006, are the first international water tenders in the Slovak Republic. 

Water and wastewater services will be provided to 950,000 people in 750 towns, villages and districts 

in Central and Northern Slovakia. 

2006 Banska Bystrica 30 year concession 660,000 water & wastewater 

This is a concession with the Banska Bystrica Water Company (StVS) which will generate revenues of 

EUR1.4billion over the contract. The town of Banska Bystrica has 85,000 people, with 660,000 in the 

region. 

2006 Poprad 30 year concession 290,000 water & wastewater 

Poprad Water Company (PVS) was awarded the concession, with annual revenues of EUR17million 

and a total contract value of EUR566million. There are 57,000 people in the town of Poprad, which is 

part of the Presov region in the North East of the country. 

Hungary 

VE aims to increase its share of the market in Hungary from 20% to 50% in the medium term. In 2007, 

it served a total of 2.3million people. 

2006 Erd Region 25 year concession 100,000 water & sewerage 

Érd és Térsége Víziközmû Kft, a joint venture with the Budapest Water Company was set up in May 

2006 for providing water and wastewater services to 100,000 people in the seven districts of Erd which 

lies to the south of Budapest. VE and Budapest Water will hold 26% of the operating company with the 

municipalities retaining 74%. 

2004 Salgótarján 20 year O&M 44,000 sewerage 

The Salgótarjáni Csatornamû Kft contract covers the operation of a sewage treatment works and 

sewerage system serving the towns of Salgótarján, Kazár, Mátraszele and Vizslás. 

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1994 Szeged 15 year concession 168,000 water & sewerage 

The Szeged contract had a FT1.16billion turnover (FT40million) in 1995. The 15 year contract was 

awarded to VE’s 100% held subsidiary Servitec, which holds 49% of Szegedi Vizmü, the holding 

company for the contract. Currently 60% of the city is connected to the sewerage network. The 

contract was gained after VE had been awarded a FT200million water treatment plant construction 

contract in 1992. The company has been profitable since 1996 and water consumption has been 

reduced by targeting leakage, installing meters and a progressive pricing policy. 

2006 Budapest 4 years, DBO 1.5million wastewater 

In 2006 Dergremont and Veolia, along with Hídépíto and Alterra, two local civil works companies, 

gained a EUR290million contract to build (EUR249million) and operate for four years (EUR40million) a 

350,000m 3 /day wastewater treatment works (wet weather capacity 900,000m 3 ) at Csepel to serve 

1.5million people in the Budapest area. The facility will enter service in 2010 and will be operated by 

them until 2014. 

1997 Budapest 25 year concession 1.9million, sewerage 

The management company formed by VE (35%), BWI (35%) and EBRD (30%) took a 25.1% stake in 

Fövarosi Csatornásási Müvek Rt., Budapest’s wastewater company. Secondary treatment capacity 

has increased from 220,000m 3 /day in 2000 to 280,000m 3 /day in 2004 (76% being used), with the 

number of customer connections rising from 137,813 to 162,753. 

Poland 

2006 Wozniky 10 year management 10,000 water 

VE’s PWIK Wozniky gained the contract for the town of Wozniky in Upper Silesia in February 2006. 

2001 TGMS 25 year concession 70,000 water & sewerage 

The contract to operate the Tarnowskie Gory and Miasteczko Slaskie water company was gained in 

December 2001. The company manages the municipal water and wastewater services for 70,000 

people in the two towns. VE’s initial 33.85% stake increased to 63.5% in 2003. The contract will 

generate total revenues of EUR125million. 

Romania 

2000 Ploiesti 25 year concession 250,000 water 

The concession was awarded to Apa Nova Plotesti SRL (73% held by VE, 27% by the municipality) in 

April 2000. EUR26million will be spent on network upgrading and renewal over 15 years and 

EUR47million on treatment systems over 25 years, with a turnover of EUR8million pa. 

2000 Bucharest 25 year concession 1.8million water and wastewater 

The concession to modernise Bucharest's water supply was granted to Apa Nova Bucuresti ANB (84% 

held by VE, 16% by the municipality) in April 2000. EUR126million was invested in the first five years 

of the concession out of an expected total of EUR1.05billion, with the proportion of households 

receiving a continual water supply rising from 39% to 91%. Annual revenues will be EUR80million pa. 

At the start of the contract, 1.8million people were served with water and 1.67million with wastewater. 

This is to increase to 2.0million during the contract. 

The Russian Federation 

In 2007, the EBRD (European Bank for Reconstruction and Development) invested EUR90million to 

acquire 10% of Veolia Voda, which while active in C&EE is primarily VE’s vehicle for the Russian 

Federation and the Ukraine. 

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2005 St Petersburg 5 year management 2million water 

Veolia Water’s SPEP (Société Eau Pure, 51% GDE, 48% Vodokanal & 1% St Petersburg municipality) 

gained a five year management contract for the city’s left bank water treatment works. This facility 

handles 1.2million m 3 /day of water. 

A partnership with Evraziysky and Eurasian Water Partnership for the development of water and 

wastewater projects in Russia was signed in October 2006, including acquiring 50% of EWP’s equity. 

EWP currently has water and wastewater contracts serving Rostov-on-Don (Voda Rostova) and 

Omsk. 

Armenia 

2005 Yerevan 10 year management 1.2million water & wastewater 

A EUR160million contract supported by World Bank funding. The initial emphasis will be in managing 

water leakage and service extension. 

United Kingdom 

Veolia Water UK has controlling holdings in three British Statutory Water Companies (SWCs), asset 

owning entities that supply water only. VE acquired six SWCs between 1988 and 1990, the most 

important of which is Three Valleys Water. VE sold its final interest in Southern Water to Southern 

Water Capital Limited in April 2006 for EUR89.6million. 

Y/E 31/03/2008 (GBPmillion) Population Equity Holding Turnover Operating Profit 

Three Valleys Water 3,000,000 100.0% 274.8 77. 

Tendring Hundreds 150,000 99.1 17 7 

Folkestone & Dover Water 163,220 78.7 13 5 

Three Valleys Water consists of the Colne Valley, Rickmansworth and Lee Valley Water companies, 

which were merged in 1994. The company grew again following a merger in October 2000 with VE’s 

North Surrey Water, which was formed in 1973 from four founder companies. The company provides 

0.858million m 3 /day of water to parts of Bedfordshire, Berkshire, Buckinghamshire, Essex, 

Hertfordshire, Surrey, and the London Boroughs of Barnet, Brent, Ealing, Harrow, Hillingdon and 

Enfield. TVW aims to install 200,000meters between 2005 and 2010. 

Tendring Hundreds and Folkestone and Dover are characterised by high levels of domestic metering. 

66% of the former company’s domestic customers had meters in 2007, while the latter company aims 

to have 90% of customers metered by 2015 compared with 55% in 2007. The Folkestone Waterworks 

Company was formed in 1848, one of the first to take advantage of the Waterway Clauses Act of 

1847, and merged with two other companies in 1953 and 1970. 

Thames Water Services was acquired by Veolia Water UK for EUR115million (GBP78million) in 

August 2007, with an enterprise value of EUR233million. UK revenues of EUR160million 

(GBP109million) are anticipated for 2008 (with EUR80million revenues gained in the first half of 2008). 

The company has two principal contracts in Wales and Scotland. 

Scotland 

1998/99 Eastern Scotland 30 year PFI BOT 585,000 sewage treatment 

Sterling Water (TWS (49%), M J Gleeson (41%) and Montgomery Watson (10%)) gained the Eastern 

Scotland contract. The original Almond Valley and Seafield GBP50million scheme for the upgrading of 

five sewage treatment works serving Edinburgh and replacing sewage sludge disposal to sea with 

land based recycling has been extended to include the GBP20million Esk Valley scheme. These 

contracts are operated by Thames Water Services. The population covered will be 585,000 at the 

start, rising to 850,000 in an area covering 1million people at the outset and 1.2million at completion. 

Wales 

2001 Wales 5 + 7 years, Customer Services 1.3million households 

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The first contract was worth GBP68million to manage customer services for Dwr Cymru Welsh Water 

until 2005. The contract serves 1.3million connected properties, representing a population of over 

3million. In 2005 it was renewed for up to 7 years. 

Ireland 

2008 Mullingar 22 year BOT 30,000 wastewater 

Total revenues for the contract will be EUR46million including a 55,000 PE sewage works which will 

cost EUR25million and is due to enter service in June 2010. 

2006 Limerick 20 year BOT 90,000, wastewater 

This is a EUR71million repair, enlargement and operation contract for the city’s wastewater treatment 

plant, which will increase its treatment capacity from 51,000m 3 /day to 87,000m 3 /day. 

Germany 

Berliner Wasserbetriebe (BWB) 

Y/E 31/12 (EURmillion) 2003 2004 2005 2006 2007 

Domestic revenues N/A N/A N/A 1,123 1,117 

International revenues N/A N/A N/A 19 17 

Services revenues N/A N/A N/A 5 5 

Total turnover 1,202 1,228 1,234 1,147 1,139 

Net profit 116 62 85 89 150 

Water sales (million m 3 ) 214 201 197 202 193 

Sewage treated (m m 3 ) 230 232 227 231 N/A 

BWB dates back to 1856, including 45 years with its services being divided by the Berlin Wall. In 1999, 

after the partial privatisation of BWB, Berlinwasser Holding AG was formed and BWB was vested into 

this company. The consortium (VE 50.1% and RWE 49.9%) acquired 49.9% of BWB for 

EUR1.69billion, with the majority 50.1% stake being held by the City of Berlin. 

1999 Berlin 30 year concession 3.9million water and sewerage 

BWB serves 3.4million people in Berlin, operating nine water treatment works and six sewage 

treatment works. In addition water is provided to 90,000 people and wastewater treatment to 0.5million 

in Brandenburg via 10 water and 24 wastewater contracts with a total of 113 local authorities. 

The sale by VE and RWE of 80% of Berlinwasser International to Marubeni in 2005 was rescinded in 

2006 and in 2007 BWB decided to continue developing these activities. Please see the RWE company 

entry for BWB International’s activities. 

Other contracts in Germany directly held by VE 

1995 Döbeln/Oschatz 20 year management 135,000 water and sewerage 

Oewa (46% held by VE, a JV with Veba Kraftwerk Ruhr AG until 1998) gained a contract for 

Döbeln/Oschatz in Saxony with a turnover of (DM17million), serving 135,000 people. 

1999 Grimma 25 year concession 85,000 water and sewerage 

The concession covers 19 communes in Saxony, 85,000 being served with piped water and 45,000 

with sewerage. The contract is worth EUR153million over its life. Oewa Wasser und Abwasser GmbH 

mainly operates in Saxony-Anhalt, holding 25 contracts, including 6 gained via the 1994 acquisition of 

Awatech. 

1999 Midewa Acquisition 400,000 water & sewerage 

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In December 1999, activities in Saxony Anhalt were boosted by the acquisition of Midewa, which has a 

turnover of EUR56million pa. 400,000 are included for water services and 200,000 for sewerage. VE 

also has a 25 year O&M contract for sewerage services in the Hanover area, with a turnover of 

EUR15million pa. 

2001 Görlitz Acquisition (74.9%) 80,000municipal services 

Saxony’s Stadwerke Görlitz had a DM120million (EUR61million) turnover in 2000. It provides waste 

management, water, sewerage, energy and public transport services to the town. 

2003 Gera 10 year BOT 165,000 water & wastewater 

The contract is with the municipality of Gera in Thuringia. Total revenues for the contract will be 

EUR130million. 

2004 Braunschweig 16 year BOT 250,000 water 

Veolia Water acquired 74.9% of Braunschweiger Versorgungs AG (BVAG) in December 2004 for 

EUR372.5million. The company manages water and wastewater services for the city in Lower Saxony. 

The company will generate revenues of EUR270-300million pa from 2005. 

2005 Braunschweig 30 year O&M 250,000 wastewater 

A subsequent contract, awarded in December 2005 covers the city’s wastewater treatment plants run 

by Stadtentwässerung Braunschweig Gmbh and is worth EUR390million. 

Belgium 

2001 Brussels 20 year DBFO 1.1million sewage treatment 

Construction of the Brussels North STW started in 2003, and the facility entered service in the first half 

of 2008. The contract is worth a total of EUR1billion over its life, including EUR290million in Capex 

and a fee of EUR49.6million pa for the Aquiris consortium. Treatment capacity will be 119million m 3 

pa. 

Sweden 

2001 Norrtalje 10 year ‘concession’ 50,000 water & wastewater 

The turnover over the life of the contract will be EUR25million. This is the first water PPP in Sweden. 

Veolia Vatten also operates the water and wastewater networks for the municipalities of Danderyd and 

Jarfalla, as well as pumping stations for Stockholms Lokaltrafik (SL). 

Norway 

2003 Oslo Construction/operation option Water treatment 

This is to be the largest water treatment plant in Norway, serving some 250,000 people and costing 

EUR73million in total, with completion planned for 2008. There is an option for a 15 + 5 year 

operations contract worth EUR102million. 

Italy 

Until 2005, VE was effectively engaged in managing a portfolio of operating contracts and strategic 

stakes. The 2005 acquisition of Enel Hydro has more than compensated for the decision to sell its 

stakes in the two Genovan water companies to Amga. It is understood that VE continues to hold 72% 

of Siemec, a company providing sewerage and sewage treatment to 700,000 people. 

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Acquisition of Enel Hydro 

75% of Siciliacque, the entity running Sicily’s water distribution system was sold to a VE and Enel joint 

venture in 2004 for EUR299million. The 40 year concession starts in 2004 and calls for investments of 

EUR1billion, including EUR300million in the first decade and reducing leakage from 30% to 12%. 

Enel’s water activities were sold to Veolia for EUR36million in May 2005. Enel Hydro SpA provides 

water to 6.1million people, mainly through Idrosicilia SpA which provides water management services 

in Sicily. VE acquired 100% of Enel Hydro in the deal, along with 20% of Idrosicilia and an option for 

Enel’s remaining 40% stake in the latter company. 

2001 Latina 30 year concession 600,000 water and wastewater 

ATO de Latina covers southern Lazio’s ATO-4, serving 38 communes. A consortium of VE (21.8%), 

Enel (23%) and Acquedotto Pugliese (23%) gained the concession in July 2001, after the tendering 

process had been held up by a dispute over the scoring system. The concession will be worth 

EUR2billion over its operating life. UFW needs to be decreased from 70% to 25-30% and major 

sewage treatment upgrades are also required. A further 500,000 tourists use the area. 

2001 Calabria 30 year concession 752,000 water and wastewater 

VE and Acquedotto Pugliese hold 49% of Societa Risorce Idriche Calabresi (So Ri Cal), serving the 

region of Calabria. The concession became operational in 2002 and involves Lira800billion of capital 

spending over its life, mainly during the first 8-10 years. 

Gruppo Camuzzi 

Gruppo Camuzzi was founded in Milan in 1929. In October 2001, Mill Hill NV, the Dutch holding 

company of the Garilli family, sold 40% of its 100% holding in Gruppo Camuzzi to Enel for 

EUR434million. In March 2002, Enel bought the rest of Camuzzi for USD870million from Mill Hill NV. 

The company is principally engaged in gas services. In 1997, Camuzzi gained a 20 year concession 

contract for water and wastewater services for the town of Massa, serving 44,051 and 30,379 people 

respectively. Camuzzi's subsidiary Gazometri in total manages 5 concessions in Lombardy, Tuscany 

and Abruzzo and supplies 40,195 customers. 6% of the group turnover in 1999 was in environmental 

services. 

Argentina 

1994/1996 Balacarse & Laprida 20 year concessions 45,000 water and wastewater 

The concessions cover two towns in the Buenos Aries region. Camuzzi holds 100% of Aguas de 

Laprida and 70% of Aguas de Balacarse. The concessions serve a total of 17,835 customers. 

USD3.54million has been spent on infrastructure development since 1994, with a 2001 turnover of 

USD1.74million. 

China 

VE’s consolidated revenues in China were EUR350million in 2003. It is by some way the fastest 

growing market VE is involved in and is set to become VE’s largest international water services market 

in the medium term. VE currently has 20 municipal and 5 industrial contracts, serving some 30million 

people in China, including 21million via full service concessions. 

2007 Haikou 30 year management 800,000 water & wastewater 

The Haikou (Hainan) contract was awarded in June 2007, following the acquisition of 49% of the 

operating company. The contract will generate revenues of EUR776million. 

2007 Tianjin 30 year management 3million water 

Veolia Water acquired 49% of the Tianjin Shibei Water Company Ltd from the Tianjin Water Works 

(Group) Company Ltd. The contract will generate revenues of EUR2.5billion. The project will cover the 

district of Shibei, the Northern part of Tianjin, and the Binhai district on the Eastern coast. It includes 

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managing the Xinkaihe water production plant (1million m 3 /day) and a 1,988km of mains and the 

500,000m 3 /day Jinbin water treatment works, currently under construction. In addition, the company 

will develop the water conveyance network to all the industrial areas in the Binhai area, situated along 

the coast of Bohai Bay. 

2007 Lanzhou 30 year management 3.2million, water 

This EUR1.6billion contract for the capital of Gansu Province was gained in January 2007. VE will hold 

45% of the Lanzhou Water Supply Company. VE will manage four water treatment plants with a total 

capacity of 2,190,000m 3 /day and 640km of water mains. 

2006 Liuzhou 30 year management 1.0million, water 

The August 2006 contract sees VE taking 49% of Liuzhou Water Services and responsibility for 

managing all water distribution services, including 4 water treatment plants with a combined capacity 

of 540,000m 3 /day. Revenues over the contract will be some EUR330million. 

2005 Kunming 30 year BOT 3.5million, water 

Signed in November 2005, this contract will generate EUR1,100million in revenues. VE and Citic 

Pacific will hold 49% of Kunming Water Supply and manage its 1.615million m 3 /day water treatment 

and distribution service. This contract generated EUR20million in revenues during the final seven 

months of 2006. 

2005 Changzhou 30 year BOT 1,200,000 water management 

Veolia Water and Citic Pacific acquired a 49% stake in the municipal company Changzhou Tap Water 

Group following an international tender. The contract is worth EUR800million and involves managing 

the company, including 5 water treatment plants (capacity 790,000m 3 /day), a 1,750km distribution 

network and customer services. 

2005 Handan 25 year BOT 800,000 wastewater 

This contract involves the construction of a new wastewater treatment plant with a capacity of 

100,000m 3 /day and its operation for 25 years. The Veolia Water Systems contract will have total 

revenues of EUR62million. 

2005 Urumqi 23 year BOT 1,200,000 wastewater 

The contract serves the capital of the Xinjiang Uyghur Autonomous Region and involves upgrading 

and operating for a 23-year period of the city’s wastewater treatment plant, in partnership with Beijing 

Capital Group (BCG). The plant’s current capacity of 200,000m 3 /day will increase to 400,000m 3/ day by 

2008. Total revenue for Veolia Water for the contract will be EUR260million. 

2003 Shenzhen 50 year BOT 7,600,000 water & wastewater 

This contract is being jointly operated with Beijing Capital Corporation (see company entry) and will 

generate revenues totalling EUR8.5billion. 45% of the contract company is held by VE and BCG and 

55% by the Shenzhen municipalities. VE is investing EUR390million into the project. At the start of the 

project, 2.6million people were served. 

2004 Weinan 22 year BOT 300,000, water 

This is a EUR190million rehabilitation and operation contract for bulk water services, providing 

160,000m 3 /day. 

2004 Hohhot 30 year BOT 2.5million, water 

The rehabilitation and operation of the Inner Mongolian capital’s water production and treatment 

system (10 plants) has a capacity of 515,000m 3 /day will generate revenues of EUR600million. 

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2004 Beijing 20 year BOT wastewater 

The Bei Yuan wastewater treatment plant is adjacent to the Olympic Village and the contract will 

generate total revenues of EUR20million. 

2004 Zunyi 35 year concession 600,000 water 

Zunyi is in Guizhou Province. This rehabilitation and operation contract is being carried out jointly with 

Citic Pacific (see company entry) and will generate total revenues of EUR210million. 

2003 Qingdao 25 year BOT 1million wastewater 

The contract (with China Everbright) covers the operation of two wastewater treatment works for the 

2008 Beijing Olympiad. Revenues will total EUR110million. The capacity of the Maidao plant was 

increased from 80,000m 3 /day to 140,000m 3 /day in 2006. 

2003 Beijing 20 year BOT 250,000 wastewater 

Veolia Water and Kerry Utilities (part of PPB of Malaysia), signed a 20 year contract to operate the 

Lugouqiao wastewater treatment plant, located in the east of Beijing. Total revenues will be 

EUR50million. This is the first private sector WWTW contract for Beijing and will be financed through a 

World Bank loan to the Beijing municipality with VE and Kerry providing an additional EUR5million. 

The plant will cost EUR40million. 

2002 Baoji BOT, 23 year 500,000 bulk water supply 

VE is to refurbish the city’s two WTWs and to expand their capacity. Revenues over the life of the 

contract will be approximately EUR300million. 

2002 Zhuhai BOT, 30 year 1,200,000 bulk water supply 

VE is to refurbish one WTW and to construct a second facility. Revenues over the life of the contract 

will be approximately EUR400million. 

2002 Shanghai 50 years, O&M 2.2million water services 

In May 2002, VE gained the water O&M contract for the Pudong business district in Shanghai. This is 

the first outsourcing contract to give a foreign company the responsibility for providing a full service 

offering: embracing drinking water production, network distribution and customer services. Veolia 

Water has bought a 50% share in a new JV company, Shanghai Pudong Veolia Water Corporation, for 

an amount of EUR266million. At the start of operations, the contract will supply potable water to 

535,000 domestic connections and 18,000 commercial and industrial customers with an average daily 

consumption of 1.2million m 3 . An immediate priority has been reducing distribution losses from their 

30% level. The entire Pudong area currently has 2.4million residents. The 50-year contract is expected 

to generate a turnover of over EUR10billion during the term due to the expected substantial growth of 

Pudong in the coming years. The business district is forecast in the long-term to be home to 5million 

people. 

1998 Chengdu BOT, 18 year 850,000 bulk water supply 

The BOT contract was awarded to Chengdu Générale des Eaux-Marubeni Waterworks (CGDEM), a 

JV with Marubeni (60% VE, 40% Marubeni). This is the first wholly foreign owned BOT water supply 

project in China. The project for Sichuan’s capital cost USD100million, USD90million going on the 

treatment plant. It supplies 460,000m 3 /day of water. Construction took 30 months and includes 27km 

of pipelines. Chengdu has a total population of 10million, of whom 3.2million live in the central area. 

The Chengdu Municipal Waterworks General Company currently only serves 1.8million people. 

Revenues of on average EUR24million pa are forecast from 2002. 

1997 Tianjin ‘Concession-type’, 20 year 3.5million water treatment 

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This was awarded for upgrading the Lingzhuang water treatment works, which has a 500,000m 3 /day 

capacity and is one of the Tianjin's largest facilities, providing water to one third of the 11million served 

by the municipality. The facility is to have its capacity increased by 250,000m 3 /day in the medium 

term. The contract generates bulk water sales of USD15million pa, with an agreed capex of 

USD30million for plant rehabilitation and the building of a new 13km piping network. CGE Tianjin 

Waterworks holds the concession, which is 55% held by a JV which is in turn 70% owned by VE and 

45% held by the municipality’s Tianjin Waterworks Co. 

Kazakhstan 

VE was awarded two contracts in March 2000: (1) A 30 year water management contract for the old 

capital Almaty (1,250,000 people) and (2) A USD40million contract for pipeline and pumping station 

renovations for the new capital Astana (300,000, to grow to 500,000). The Almaty contract never 

started due to delays by the Government causing VE to pull out. VE retains an industrial water 

services presence in the region. 

Republic of Korea 

2004 Kumdan 23 year BOT 150,000, wastewater treatment 

The Kumdan WWTW is located near Incheon. The facility will have a capacity of 40,000m 3 /day and 

will generate consolidated revenues of EUR80million. The contract is jointly run by Hanwha 

Engineering & Construction Corporation & Doosan Construction & Engineering. 

2001 Incheon 23 year BOT 260,000 sewage treatment 

The Incheon contract (Samsung Veolia Incheon Wastewater Co., Ltd., VE 80%, and Samsung 

Engineering 20%) involves USD300million being spent on two sewage treatment works (Mansu, 

70,000m 3 /day and Songdo, 30,000m 3 /day) with a total capacity of 100,000m 3 /day. The two facilities 

entered service in April 2005. 

Japan 

VE has had a low key presence in Japan, being involved in short term wastewater maintenance 

contracts for some years. Major contracts have been gained since 2006, including two three year O&M 

wastewater treatment works in 2006 (Saitama, a district near Tokyo and for Hiroshima) and in April 

2007, VE gained a three year O&M contract for a 283,000m 3 /day wastewater treatment plant serving 

500,000 people in Chiba, which will generate total revenues of EUR17.8million. 

In July 2007, Veolia Water Japan and J-Power (Japan’s Electric Power Development Co) acquired 

Fresh Water Miike, a water management unit of Mitsui Mining Co. This company, now named Fresh 

Water Service Co provides water services for half of the households in Omuta, Fukuoka Prefecture 

and the neighbouring Arao in Kumamoto Prefecture. VE made four further acquisitions of water 

technology companies in Japan during the first half of 2008: 

Company Revenues Revenue year 

Nishihara Environment Technology EUR38million 2007 

Dai Nippon Eco Engineering EUR8million 2008 

Yamagata Kangyo Engineering EUR4million 2007 

Nichijo EUR7million 2006 

India 

VW India gained a four year performance contract to provide continual water supplies at various pilot 

locations in the state of Karnataka, serving 200,000 people through 33,000 connections including 

10,000 social connections. 

2007 Nagpur 5 year O&M 100,000, water 

2008 Nagpur 15 year DBO 650,000, water 

Revenues for the 30 month construction and 15 year operations contract will be EUR24million, 

including construction. The 240,000m 3 per day water treatment plant contract was awarded in June 

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2008 and builds upon an earlier rehabilitation contract and a pilot services upgrading project designed 

to provide a continual water supply for 10,000 customers (100,000 people) in the city. 

Indonesia 

1997 Sidoarjo 25 year BOT 100,000 bulk water supply 

This concession is for bulk water provision to PDAM Delta Tirta Sidoarjo, the local water entity. The 

concession holds 95% of the equity, along with Indonesia’s PT Agumar Nusa and PT Hansa Letsari. 

The build and management concession will entail a capital investment of IDR130billion, or a 

EUR4million investment by Veolia Water. The facility will have a 20,000m 3 day capacity, for 100,000 

people. 

Philippines 

The 1998 Fort Bonifacio concession was sold to a third party in 2007. 

2000 Manila 25 year concession Water supply and sewerage 

The concession for the Clark Economic Zone is similar to the Fort Bonifacio contract. In this case, it is 

for a 4,400ha site earmarked for future development, where EUR25million will be spent developing the 

basic water and wastewater infrastructure in the first three years of the contract. 

Malaysia 

The company gained its first concession in 1995 and has made further progress by working with local 

companies so as to take over the operation of their concession contracts. 

1995 Selangor 25 year O&M contract 1.4million water provision 

The Selangor contract involves bulk water provision for the entire state. This involves the management 

and rehabilitation of the state’s 26 water treatment plants with VE as a subcontractor to Puncak Niaga. 

Gabon 

1997 SEEG 20 year concession 910,000 utility services 

VE won the tendering process to acquire a 51% stake in the Gabonese public utility Société 

d’Electricité et d’Eau du Gabon (SEEG), with 49% of SEEG held by local investors. This is a 

XAF700million concession for water production and electricity distribution to the three principal cities; 

Libreville (422,000 people served with water), Port-Gentil and Franceville, including XAF200million for 

water. Average tariffs fell by 17% at the start of the contract and have been held to less than the rate 

of inflation since then. 

Water coverage 1993 coverage 2000 target 2000 actual 

Libreville 49.3% 53.0% 61.3% 

Franceville 38.6% 43.0% 58.0% 

Port Gentil 37.7% 43.0% 49.5% 

There were 100,385 customer connections in 2005, including 17,978 which have subsidised 

connections using less than 15m 3 /month. By 2006, the connection rate had risen from 40% to 70%, 

with 192,000 people in worse off areas being connected to water and sewerage since 2002. 920,000 

are currently provided with electricity services and 607,000 with water services out of the country’s 

population of 1.3million. 

Niger 

2000 SEEN 10 years, management Up to 2.1million, water 

Supported by USD65million in funding by the World Bank’s IDA, the French Development Agency and 

the West African Development Bank, this 10 year affermarge contract for Société d'Exploitation des 

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Eaux du Niger (SEEN, 55% VE, 45% local investors) covers 52 urban centres and charges on 

average XOF208/m 3 (EUR0.3) for drinking water. Between 2001 and 2005, the number of connections 

rose from 58,000 to 79,433, including 11,688 new low cost connections. Niamey (600,000 people) is 

the initial target area, with other addressable markets to be covered later. The contract will be worth a 

total of EUR150million and aims to serve 1million people when fully operational. Bill collection rates 

were 97% in 2004, reflecting a programme to optimise affordability for all clients, with 84% network 

efficiency and 97% water quality compliance in 2005. 

Burkina Faso 

2001 Ouagadougou 5 year support services 900,000 water 

VE, along with local companies Cabinet Mazars and Guerard was awarded a five year support 

services contract supported by the World Bank to expand services for the city aiming to cover 

0.9million people. 

Chad 

2000 STEE Phased PPP Up to 7million water 

Société Tchadienne d’Electricité de l’Eau (STEE), Chad’s water and electricity utility, may undertake a 

series of PPP exercises, involving greater degrees of private involvement over a series of phases. An 

O&M contract started in 2000, but little evidence of this contract developing has since been noted. 

Morocco 

The two concessions currently serve 3.6million people in 38 local authorities through 738,500 

electricity and 588,500 water customer connections including 48,500 low cost water and sewerage 

connections. 3.2million people are served with water and sewerage. A particular emphasis has been 

placed on water network efficiency: 

% efficiency 2002 2004 

Tangier 60.9% 73.4% 

Tétouan 52.7% 66.0% 

Rabat 68.0% 81.7% 

2001 Tangier & Tétouan 25 year concession Up to 1.4million water & electricity 

The concession serves a total of 23 districts within the two cities. VE (51%) is the lead company in 

Amendis a consortium comprising ONA of Morocco, SOMED (Morocco and UAE) and Canada’s Hydro 

Quebec. The two concessions cover water & wastewater and electricity services for 23 districts within 

the two cities, serving a total of 1.4million people; 780,000 in Tangiers and 630,000 in Tetouan. The 

Tangiers contract were designed to generate revenues of EUR66million pa from 2001 and the 

Tétouan contract will generate revenues of EUR39million, with combined revenues of EUR130million 

pa by the fifth year. The concessions involve network and service maintenance, with an emphasis on 

extending and rehabilitating sewerage services. The concessions will also be designed to take into 

account the population growth anticipated over the duration. 28,500 low cost water and wastewater 

connections have been made to date, along with the aim of 90% sewerage coverage by 2008. 

1999 Rabat 30 year concession Up to 2.2million, water & sewage 

The EUR4.6billion utility privatisation for Rabat and Sale was awarded to Redal, Dragados’ consortium 

with Electricidade de Portugal, Pleiade (Portugal) and Alborada (Morocco). Rabat’s utilities serve 

1.7million people, with a EUR138million (USD130million) turnover for water, sewerage and electricity 

services in 1998. 84million m 3 of water was delivered in 2000. Dragados sold its stake to VE in 

November 2002. MAD700million (EUR64million) was invested in the area in 2003, including 

MAD350million in wastewater treatment facilities, concentrating on a new WWTW in Skhirat. 15,000 

low cost water connections and 20,000 low cost sewerage connections have been made since 2002. 

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Oman 

2006 Muscat 5 + 3 year management 700,000 wastewater treatment 

A five-year management contract with a three-year extension option was awarded by the Oman 

Wastewater Services Company in June 2006 to assist in the management of wastewater services in 

Muscat. OWSC is responsible for all wastewater services in Muscat under a 30 year concession 

agreement at the beginning of 2006 with the Government of Oman for the acquisition, development 

and operation of Muscat’s wastewater collection and treatment system. 

2007 Sûr 22 year BOO 350,000 water provision 

In January 2007, VE gained a EUR434million 22 year contract to build, finance and operate a 

80,200m 3 /day RO desalination plant for the city of Sûr and the surrounding region of Sharqiyah. The 

facility will cost EUR111million to construct in partnership with Bahwan Engineering Co (VE 60%, 

Bahwan 40%). 

Saudi Arabia 

In April 2008, Veolia Water AMI was awarded a six year EUR40million incentive-based management 

contract for improving aspects of the management of the 10,000km Riyadh water supply system and 

the 4,500km sewerage system. The former will involve reducing leakage from its current 50% level 

and the latter in improving the connection rate of the city, where currently 2.0million of the 4.5million 

inhabitants are connected to the system. 

United Arab Emirates 

2007 Fujairah 12 year O&M 130,000, desalination 

Veolia Water was awarded a contract to operate and manage the reverse osmosis desalination plant 

at the F2 IWPP project in Qidfa, Fujairah in December 2007. There is a three year pre-operational 

phase prior to the facility entering service in 2010. 

2007 Abu Dhabi & Al Ain 25 year BOT 1.2million, wastewater 

A EUR364million contract (including construction), which was announced in July 2008. The Abu Dhabi 

(850,000 people in 2008) plant will have a 300,000m 3 per day capacity and the plant serving the 

emirate’s second city, Al Ain (348,000 people in 2003) will treat 130,000m 3 per day. Construction will 

take 3 years, with a 22.5 year operating contract on completion. The shareholding is similar to the 

Ajman concession. In addition, VE has a DBO contract (the 3 year operating phase generating 

revenues of EUR10million) to treat the water in the artificial lake by the Burj Dubai Tower which was 

also gained in 2008. 

2006 Ajman 27 year Concession 235,000 wastewater treatment 

The concession was awarded in February 2006 to Moalajah. This company is managing the 

concession and is 67% owned by VE and 33% by Besix of Belgium. The concession company is in 

turn 50% held by Besix, 20% by VE, 10% by Black & Veatch and 20% by the Ajman Government. A 

90,000m 3 /day facility will be constructed from 2007-09, along with 230km of sewerage and the 

contract will generate EUR151million in revenues. This supersedes the Thames Water/Black & Veatch 

BOT, whereby a USD100million refinancing, using the first monoline credit facility in the Middle East 

formed part of Thames Water selling its 60% stake in the original 2003 concession to the new holders. 

Israel 

2001 Ashkelon 25 year BOT 1.4million water desalination 

VID Investment Consortium, comprising VE, IDE and Dankner of Israel gained the BOT contract. VE 

holds 50% of OTID, the construction company’s equity, and 49.5% of ADOM, the operating company. 

The contract covers the construction and operation of two 54million m 3 pa facilities, the largest 

membrane sea water desalination plant in Israel. Total revenues will be EUR900million, with the plant 

costing USD110million to build. The provision price of USD0.527/m 3 was well below expectations due 

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to new technologies purchased by VE and a relatively low cost of capital. The facility entered service 

in 2003 with full capacity in 2005. 

Australia and New Zealand 

United Water was set up in 1995 to bid for the Adelaide contract, as a vehicle for securing business for 

the state in other parts of Australasia. VE bought out Thames Water, its United Water joint venture 

partner in 2005. 

Australia 

VE serves 2.1million people in Australia. In December 2006, VE was appointed as a consultant to the 

State of Queensland for the development of all installations and infrastructure, and will then operate 

these installations. This project, whose completion is anticipated for the end of 2008, represents a 

global investment of EUR1.2billion for the State of Queensland. 

2006 Queensland – I DBO Wastewater recovery 

The first contract involves the recycling of wastewater from sites at Oxley, Wacol, Goodoa and 

Bundamba, Luggage Point and Gibson Island. The volume of water treated by microfiltration or 

ultrafiltration, reverse osmosis and UV, will be 232,000m 3 /day. The water will be used by industrial 

customers. The facilities entered service in 2008. 

2006 Queensland – II 10 + 5 year DBO 450,000 water 

A 125,000m 3 /day desalination plant will supply residents of the Gold Coast and the South Eastern 

Region of Queensland. The 10 year O&M phase can be extended by a further five years. The initial 

O&M phase will generate revenues of EUR210million. 

1995 Adelaide 15.5 year BOT 1.1million water & sewerage 

This was the first contract gain by the TWI/VE UW alliance. It is now 95% owned by Veolia Water. The 

project involves AUD650million of construction work and the concession will be worth AUD1.5billion 

over its life. The contract involves the construction and operation of six water treatment plants and four 

sewage treatment plants and allied distribution infrastructure. The first phase entered service in 1996 

and the construction project was completed in 1998. 

2006 Ballarat 15 year BOOT 115,000 wastewater 

A EUR43million construction and operation contract for a wastewater treatment plant to serve the city. 

1999 Ballarat 25 year BOOT 115,000 water supply 

UW is responsible for the O&M element of the contract originally awarded to Thames Water. An 

additional 20 year contract covering four local water works was gained in 2003 serving 5,000 people in 

the neighbouring towns of Beaufort, Blackwood, Clunes and Forest Hill. 

Other contracts are operated through General Water Australia. 

1996 Sydney 25 years, BOO 500,000 water treatment 

The AUD180million treatment Wyuna Water project currently handles 370Ml/day and can be further 

upgraded to 534Ml/day. The Woronora plant (160Ml/day) entered service in April 1997 and the 

Illawarra Plant (210Ml/day) in December 1996. 

2007 Sydney 23 years, DBO 500,000 water treatment 

This is a reverse osmosis desalination plant with an initial capacity of 250,000m 3 /day which can be 

expanded at a later date to 500,000m 3 /day. The EUR540million contract includes a three year 

construction phase followed by a 20 year operating phase. 

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1998 Noosa 15 years DBO 54,000 water treatment 

This involves a holiday resort in Queensland with an off-season population of 44,000. The 45L/day 

facility entered service in December 1999. 

2000 Coliban 25 years BOOT 110,000 water treatment 

The Aquia 2000 project for Victoria’s Coliban Water Authority consists of three WTWs serving Bendigo 

(126Ml/day), Castlemaine (18Ml/day) and Kyneton (8Ml/day). 

2001 NSW 20 years DBO 11,000, wastewater 

A sewage treatment works for the townships of Gerringong and Gerroa, 120km south of Sydney. The 

facility entered service in August 2001 and the recovered water is used for farm irrigation. 

2000 Maffra 10 year BOT Water treatment 

The USD10.6million contract is for an industrial water treatment facility in the state of Victoria. 

New Zealand 

1997 Papakura 30 year BOT 41,000 water & sewerage 

Papakura is an urban district of Auckland. The AUD12million contract was awarded to UW in 1997. 

2002 Ruapehu 10 year O&M 15,000 water & sewerage 

In November 2002, UW started a 10 year O&M contract with the Ruapehu District Council, a rural 

region of approximately 15,000 residents located 320km south of Auckland. The contract covers rural 

water and wastewater treatment facilities, 117km of water pipes, 97km of wastewater pipes, 3,670 

wastewater connections, 4,570 water connections and 38km of stormwater pipes. 

2004 Thames-Coromandel 10 year O&M 25,000 water & sewerage 

Thames-Coromandel District is in the North Island. It has a residential population of 25,000 rising to 

150,000 during the summer. There are 14,650 water and 18,100 wastewater connections. 

1995 Wellington 25 year DBO 170,000 sewerage 

Two sewage treatment works have been constructed at a total cost of NZD149million (GBP50million), 

along with a sludge de-watering plant and a 1.8km long sea outfall at Moa Point. The construction 

phase ended in 1998, and. the facility is now in service, with a 21 year operating contract. United 

Water acquired Anglian Water International (NZ) in June 2004. 

Latin America 

Turnover for Proactiva Medio Ambiente was EUR443million in 2000, with net profits of EUR7.3million. 

Revenues have been impacted by currency weakness and fell to EUR145million in 2002. This has 

been further reduced to EUR34million in 2003 due to the non-renewal of a number of contracts, most 

notably for Puerto Rico. 

Argentina 

Proactiva Medio Ambiente was awarded the Catamarca contract in April 2000 for water supply 

management for the departments (parts of the town) of Capital, Vallejo Viejo and Fray Mamerto 

Esquiú in the province of Catamarca, in the northwest part of the country. It was rescinded in 2006. 

Venezuela 

1997 Monagas 30 year concession 552,000 water 

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Proactiva Medio Ambiente Venezuela gained the Hidrocapital concession for the water supply and 

sewerage for the north east sector of Caracas in July 2002. The service area has 650,000 inhabitants. 

Forecast revenue is USD2million pa. 

Colombia 

1998 Bogotá 20 year BOT 2million water 

This is the contract for upgrading and expanding the TIBITOC water treatment works in consortium 

with 2 local partners, with Proactiva holding 33% of the equity. The contract involves USD78million in 

investment, USD22million in the first 3 years. Total contract revenues will be USD300million. The plant 

has a capacity of 900,000m 3 /day serving some 2million people. 

1996 Tunja 20 year concession 151,000 water & wastewater 

2000 Monteria 20 year concession 329,000 water & wastewater 

The Monteria concession was gained by Proactiva Medio Ambiente in December 1999 and will 

generate COP29billion in revenues, with COP10.5billion in investments over the contract life. It serves 

329,000 people with water and 124,000 with sewerage. The Tunja concession serves 151,000 with 

water and 148,000 with sewerage. 

Brazil 

1998 Parana Strategic stake acquisition 8.1million water & sewerage 

The operating consortium paid BRL249.8million (USD217million) for 40% of Sanepar, the water and 

sewerage company serving the state of Parana, with Proactiva holding a 35% stake in the consortium. 

Since 2003, VE’s role in the concession has been eased. 

Mexico 

VE’s JV company, Omsa, operates four contracts serving a total of 6million people. Since 1993, VE’s 

stake in Omsa has increased from 33% to 38% in 1996, to 45% in 1997 and to 50% in 1998. ICA, 

VE’s partner, is a Mexican civil engineering and construction company. Caasa serves 506,000 people 

in the city and more than 300,000 in the surrounding areas; 851,000 with water and 843,000 with 

sewerage. The 30 year concession was granted in October 1993 and is 90% held by Proactiva. 

Sapsa (Mexico City) 2.43million Water management services (1993-2009) 

Caasa (Aguascalientes) 0.85million Water and waste water concession 

Puebla 1.20million Water and waste water concession 

Acapulco 1.50million Water and waste water concession 

USA 

US Filter’s (USF) involvement in public-private partnerships (PPPs) go back to the first partnership for 

water services in the USA awarded in 1972. The management contract for Burlingame’s (CA) 

wastewater treatment facilities remains in USF’s hands. The Bethlehem Steel contract signed in 1950 

was the first industrial outsourcing contract in the USA. Upon the purchase of US Filter by Veolia 

Environnement in 1999, US Filter and the former Professional Services Group of Aqua Alliance were 

merged to create North America’s largest water and wastewater outsourcing company, in 2003 serving 

14million people in 600 communities and thousands of companies across all industrial and commercial 

markets through 91 water and 185 wastewater treatment plants. According to Public Works Financing, 

US Filter has been the North American market leader in PPPs in recent years. Following the sale of 

the non-core activities, USFilter Operating Services has been renamed Veolia Water North America 

(VWNA). 

2008 Oklahoma 4 year O&M water 

This is an extension of a contract that has been sunning since 1985 and the latest phase will generate 

total revenues of EUR29million. 

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2008 New London 10 year O&M 50,000, water & wastewater 

New London is in Connecticut. The contract will manage the sewerage services for 14,000 customers 

and water services for 6,000 customers with total revenues of EUR37million. 

2007 Milwaukee 10 year O&M 1.1million, wastewater 

Awarded in December 2007, the EUR272million contract covers the management of the regional liquid 

waste management network of Milwaukee, Wisconsin and management of the production of 

Milorganite, fertiliser granules produced by the drying of residual mud from the waste water purification 

plant. 

2007 Tampa Bay 16 year DBO Water treatment 

A USD158million contract to expand the regional water treatment plant in Florida from 272,500m 3 per 

day to 454,200m 3 per day, which will enter service in 2010. VE will operate the facility for 13 years 

from then. 

2006 NY State 7 year DBO Wastewater treatment 

A USD45million contract for the 1.5million gal/day (7,000m 3 /day) facility serving Rockland County. 

2005 Gresham, Oregon 7 year O&M 106,000 wastewater treatment 

The contract is worth USD21million and involves handling 20million gal/day of effluent. 

2004 Richmond, CA 18 year O&M wastewater treatment 

The contract is worth EUR50million. 

2004 Virgin Islands 20 year BOT 75,000 wastewater treatment 

Two 18,000m 3 /day wastewater treatment facilities are to be constructed at St. Croix and St Thomas. 

Both facilities are expected to enter service at the end of 2006, generating revenues of USD126million 

throughout their contracts. There is also a five year renewal option. 

2002 Indianapolis, IA 20 year O&M 800,000 water treatment 

At USD1.5billion, it is the largest PPP in the United States’ history. The system produces an average 

of 138million gal/day for residents in the city and within a 25 mile radius around the city. 

2002 Atlanta, GA 10 year O&M Manage city-wide biosolids system 

USD200million agreement to produce and market 100 dry tonnes/day of biosolids. VWNA is the 

leading biosolids services supplier in the U.S, serving 130 different communities. The contract was 

terminated by Atlanta in 2006. 

Canada 

Veolia Water Canada (VW Canada) is a subsidiary of VWNA. Its activities draw from the USF 

operations and, since 1976, VW Canada has gained 22 municipal O&M contracts. With the exception 

of Moncton (New Brunswick) all identified contracts are in Ontario. 

2006 Brockton Five years, O&M 10,000, water & wastewater 

The contract announced in July 2006 involves the management of three water treatment plants with a 

capacity of 2.29mg/day and one wastewater treatment plant with a capacity of 1.98mg/day. Revenues 

will be USD0.47million pa. 

1997 Haldimand/Norfolk O&M 200,000, wastewater 

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The original contract in 1997 was for both counties. In 2004, separate contracts were drawn up for 

each county. The Norfolk contract covers three WWTWs with a capacity of 24mg/day and the 

Haldimand contract is for four WWTWs with a capacity of 16mg/day. 

1999 Toronto 15 years, DBO 1,000,000, wastewater biosolids 

The contract covers the biosolids drier and pelletiser facility serving the city’s 216mg/day Ashbridges 

Bay WWTW. 

1998 Moncton 20 years, DBFO 100,000, water 

This was the first major PPP contract gained in Canada. It was agreed in April 1998 and covers a 

94,635m 3 /day (25mg/day) water treatment facility. The CAD85million contract will save the city some 

CAD12million on anticipated capital costs. 

Six other contracts have been identified: 

Location Date Population Service 

Bayfield N/A 2,000 Water 

Georgian Downs 2001 1,000 Wastewater 

Goderich 2000 15,000 Water & wastewater 

Huron-Kinloss 2003 N/A Water 

Port Stanley 1997 2,500 Wastewater 

Varna 2001 500 Water 

VE in industrial outsourcing 

21% of VE’s water turnover in 2000 was with industrial clients, which rose to 33% by 2006. VE’s 

industrial outsourcing contracts have a typical duration of between 3 and 10 years, although an 

increasing number of contracts now run for 15 or 20 years. Overall multiservice revenues were 

EUR400million in 2003, rising to EUR440million in 2006, with EUR370million in large industrial client 

contracts gained that year. During 2003-04, Veolia Environnement signed several multiservice 

contracts (water, waste and energy) with industrial customers for cumulative revenues of around 

EUR1.25billion. VE’s multiservice customers include Arcelor, Aventis, BP, Novartis, PSA, Renault, 

Solvay and Total. Veolia’s 15 year contract with Renault was expanded in 2006 to include a five year 

management contract covering all service facilities in the Paris region with the aim of cutting 

expenditure by 20% during this period. The Novartis contract was renewed for 7 years in December 

2007 and will generate EUR980million in revenues. 

Industrial outsourcing in the Americas 

In the US, USF enjoyed a 53% market share for identified industrial water and wastewater outsourcing 

services in 2002, according to Public Works Financing. Major recent developments include a 20 year, 

USD66million contract with Alon, USA, to manage the water, wastewater, sludge and groundwater 

facilities at its Big Spring refinery in Texas and the acquisition of MCS Technologies LLC, a leader in 

the refinery waste separation and treatment services market, based in Corpus Christi, Texas. The 15 

year IPSCO Steel contract was gained in 1999 while the USD100million Sunoco contract was gained 

in 1998. Contracts gained in 2000 include Westlake (15 year, USD75million), Conoco (USD30million), 

GM (USD30million) and BP (USD1.3million). In 2001, VE gained a EUR300million 15 year industrial 

services contract for Usinor’s Vega do Sul facility in Brazil. The 10 year effluent management contract 

for Millennium Chemicals, signed in 2001, is worth EUR165million. 

In 2003, USF gained contracts with the Dupont and Kerr-McGee chemical and energy groups for 

terms of between 15 and 20 years with an aggregate estimated total revenue of more than 

USD100million. 

Industrial outsourcing in Europe 

Veolia Water Industrial Outsourcing provides water and wastewater management services to industrial 

customers in the UK and Ireland. Contracts include a 10 year contract with Shell to supply all of their 

chemical and oil refineries on site with up to 3,500m 3 /day of softened water on a DBO basis, and a 10 

year O&M contract with Mettis Aerospace (the aerospace component manufacturer) regarding its 

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effluent treatment plant as well as to supply its manufacturing operations with recycled process water. 

During 2002, a EUR27million 15 year contract with Arcelor Packaging and a EUR11million 12 year 

contract with Smurfit Cellulose du Pin were gained in France, both for effluent treatment. 

In October 2001 VE acquired Depurazioni Industriali (DI) from Italy’s Montedison. DI specialises in the 

treatment of industrial waste water, and generated EUR8million in revenues in 2001. The company 

owns three plants where it treats effluent from three industrial sites operated by Montedison’s Cereol 

and Novaol under 20-year management contracts, along with effluents from third parties. VE also 

reached a partnership agreement with the Montedison group for a three year exclusive right between 

Veolia Water and the four companies (Cereol, Cerestar, Provimi and Beghin Say) resulting from the 

2001 Eridania Beghin Say contract, covering the outsourcing of water management at over 50 

industrial sites throughout Europe. VE believes that the industrial water outsourcing service market in 

Italy is worth EUR300million. 

In the Czech Republic, a EUR20million 10 year contract with Spolchemi involving the design, 

construction and operation of an effluent treatment plant was signed in 2001. In 2002, a EUR5million, 

10 year water and wastewater services contract was signed with Cutisin’s Jilemnica, a subsidiary. In 

September 2003, Veolia Water gained an industrial services contract with Synthesia, a member of the 

Unipetrol Group covering the operation of Synthesia’s wastewater treatment facility. The 200,000 PE 

plant also treats wastewater from the city of Pardubice (population of 100,000 in eastern Bohemia), 

where the company is located. The 10 year contract will generate revenues of EUR90million. 

Other contracts in the Czech Republic include: Glaverbel Czech (producer of flat glass-process water 

supply); Termo Decin (operation of water management facilities); Cutisin (producer of food packagingwastewater 

and process and drinking water); ICN Czech Republic (pharmaceutical-operation of an 

industrial and municipal WWTP complex); Eastman Sokolov (producer of commodity productswastewater 

and drinking water); Keramika Horni Briza (ceramic tiles-wastewater treatment plant); 

Intersnack (Ceske Budejovice); Airport Line; Hennlich (Usti nad Labem); Marius Pedersen (Plzen); 

Rudolf Jelinek (Zlin) and Setuza (Olomouc). 

Veolia Water signed a contract in Hungary with Hajdú-Bét, a major poultry slaughterhouse located in 

Debrecen, in the east of the country. The 3 year contract covers the operation of a wastewater pretreatment 

plant and will generate revenues of EUR1million. 

Other contracts gained in 2003 included Johnson Matthey (United Kingdom) MD Papier GmbH & Co. 

(Germany), and Grande Paroisse S.A. (France, a subsidiary of the Atofina Group). Total revenues for 

these contracts will be EUR57million. 

A EUR60million 10 year contract was gained in March 2004 by VE’s Globalis GmbH for environmental 

services at Visteon’s German site in Duren. This was the first multi service contract awarded in 

Germany. A EUR78million 10 year contract signed with Corus Packaging Plus in Trostre (Wales, UK) 

in 2004 concentrates on effluent treatment services. 

In April 2005, PSA Peugeot Citroën outsourced the environmental management activities of its new 

factory in Trnava, Slovakia to VE. The eight year contract will generate revenues of EUR60million. 

A EUR42.7million upgrade for the Bayswater treatment plants, which serve the Bayswater and Liddell 

power stations in New South Wales, Australia was awarded in June 2006. This includes a five year 

operations and maintenance for facilities. 

Outsourcing in Asia & Oceania 

Australia 

In September 2008 Veolia Water and AquaNet Sydney Pty Ltd (part of the Jemena Ltd group) signed 

a contract with the Sydney Water Corporation for the first private scheme provide recycled water to 

industrial users in New South Wales. This will ease demand on Rosehill and Camellia’s drinking water 

supplies, in western Sydney by providing 4.3billion litres pa of water for major industrial customers, 

with a future capacity for a further 3billion litres of water per year if needed. The BOOT contract will 

generate revenues of EUR122million over 20 years with a EUR30million 20,000m³ per day water 

recycling facility being developed in 2009. 

244 



FRANCE 

Malaysia 

In September 2002, VE signed a contract with Petronas for outsourcing services in water treatment 

and supply at the Kertih petrochemical complex in Malaysia. The 20 year contract does not involve 

any investment on the part of Veolia Water. The company will operate a potable water production plant 

with a capacity of 250,000m 3 /day and a distribution network serving customers such as BP Chemicals, 

Mitsui and Union Carbide, which work with Petronas in the petrochemical complex. The contract will 

generate revenues of EUR200million over its lifetime. 

Singapore 

VE signed a six year contract worth EUR53million for the construction and operation with Showa 

Denko, a subsidiary of the Japanese group Showa, for an ultra pure industrial water treatment unit in 

2006. 

Korea 

The USD1billion Hyundai Petrochemical’s Daesan contract (January 2000) runs for 20 years. The 

Hynix Semiconductors Corporation 12 year EUR900million contract for Hyundai of Korea is the largest 

industrial water outsourcing contract in the world to date. The contract calls for four ultra-pure water 

plants and two WWTWs. VE is acquiring the company’s water and wastewater facilities for 

EUR196million and will generate EUR830million in revenues over the next 12 years. It was extended 

to 17 years in 2006 and in 2008, a new treatment plant entered service. A contract was gained in 2004 

with the Kumho group for the maintenance and operation of water and wastewater facilities at Kumho 

Rubber Ulsan, and Kumho Petrochemical and Kumho Polychem (15 years, O&M) at the Yeosu 

National Industrial Complex. 

Thailand 

Global Utilities Services Co. Ltd (Thailand) is a JV between Veolia S.Napa (49%), Industrial Estate 

Authority of Thailand (49%), and the IEAT Provident Fund (2%). GUSCO currently has 8 industrial 

water management contracts in Thailand, including Sony, Egco, GM and Ford, with a THB900million 

(USD21.2million) turnover or USD2.65million pa per contract. 

In May 2007, a 15 year DBO contract was signed with PTTPE, worth EUR75million for the 

construction and operation of a water treatment plant. 

China 

In January 2006, a 25 year industrial wastewater management contract was agreed with Sinopec at 

Beijing Yansan PetroChemical’s Yanshan facility, 50km south west of Beijing. The EUR249million 

contract involves running four wastewater treatment plants with a total capacity of 129,000m 3/ day 

including the recovery of 40,000m 3 /day of process water. 

Two water contracts were gained in 2007; Tianjin Soda (construction and operation, 27 years, worth 

EUR492million) and Qingdao Soda (operation of a water demineralisation facility for 25 years, 

generating EUR33million). 


Name: Veolia Environment SA 

Address: 42 Avenue de Friedland, 75008 Paris, France 

Tel: +33 1 71 71 10 00 

Fax: +33 1 71 71 11 79 

Web: www.veoliaenvironnement.com 

www.veoliawater.com 

www.generale-des-eaux.com 

Henri Proglio (Chairman and CEO) 

Jerome Contamine (CFO) 

Antoine Frerot (CEO, Veolia Water) 

Paul-Louis Girardot (Director, Generale des Eaux) 

245 


GERMANY 

PART 3(i): COMPANY ANALYSIS MAJOR PLAYERS – RWE AG 

RWE AG 

RWE is the largest of the German multi-utilities. In the late 1980s, the company began to develop 

RWE Umwelt AG into one of Europe’s largest waste management companies. In the mid 1990s, the 

company set up RWE Aqua as a subsidiary of Umwelt, to exploit the opening up of the water and 

wastewater markets in Germany and in central and Eastern Europe. 

RWE – Water acquisitions 2000-03 

Company Year Revenues 

EURmillion 

Stake 

(%) 

Equity value 

EURmillion 

Thames Water plc, UK 2000 2,247.00 100.00 7,100.00 

ESSBIO, Chile 2000 46.00 51.00 340.00 

E’town Corporation Inc., USA 2000 190.00 100.00 670.00 

ANSM, Chile 2001 22.00 N/A N/A 

ESSEL, Chile 2002 20.00 25.50 150.00 

Ondagua & Pridesa, Spain 2002 148.00 75.00 95.00 

China Water Company, China 2002 [1] 9.70 48.80 N/A 

RWW, Germany 2002 97.00 14.30 to 74.90 194.00 

RWW, Germany 2002 97.00 74.90 to 79.80 N/A 

American Water Inc., USA 2003 1,700.00 100.00 4,500.00 

[1] Six months to 31-10-2001 

RWE sought to become the third largest European water company by 2005 and achieved this by 

2000 through its agreed bid for Thames Water. As a result of the September 2001 bid for American 

Water Works, RWE is now the third largest water utility company globally and the market leader in 

Germany, the UK and the USA. In 2005, RWE completed the divestment of RWE Umwelt and 

decided to sell its activities outside Germany and Central & Eastern Europe. 

A move away from water… 

In 2004, RWE decided to concentrate on its European and American activities and is considering the 

fate of its other contracts on the basis of a “managed exit from all non-core markets”. After a series of 

differing announcements on its Chilean and Spanish operations during 2005, the company formally 

announced in 2005 that it would divest its Thames Water and American Water Works holdings, along 

with its water activities outside continental Europe. In December 2006, Thames Water was sold to 

Kemble Water, a special purpose vehicle organised by the Macquarie European Infrastructure Fund 

for GBP4.8billion plus GBP3.2billion in assumed debt. The total value of the divestment of 

EUR11.9billion resulted in a book gain of EUR0.7billion for RWE. 

…save for a safe European home 

For the time being, RWE is retaining BWB and its other German activities, along with those directly 

held by the company in Central & Eastern Europe. This covers approximately 15million people, often 

within multi-utility contracts. 

Divestment progress and plans (up to October 2008): 

Pridessa / Ondagua Spain Sold to Acciona (EUR150million) 

Thai Tap Water Thailand Sold to CH Karnchang, its JV partner 

Ajman UAE Sold to Veolia 

Berlinwasser International Global Sold to Marubeni, but bid was rescinded in 2006 

China Water Company China 48% stake sold to Biwater in 2007 

United Water Australia 47.5% stake sold to Veolia, its JV partner 

ESSAM/ESSBIO/ESSEL Chile Sold to Southern Cross (USD300million) 

Thames Water England Sold to Macquarie in 2006 

American Water Works USA 39.5% stake sale & IPO, May 2008 

246 


GERMANY 


RWE AG, profit and loss account 

Y/E 30/06 (EURmillion) 2003 2004 2005 2006 2007 

Turnover 43,875 42,137 39,487 42,554 42,504 

Pre-tax profit 2,123 3,935 3,156 3,537 5,233 

Net profit 93 2,137 2,231 3,847 2,659 

Earnings/share (EUR) 1.69 3.80 3.97 6.84 4.73 

FY 31/12 (EURmillion) 2003 2004 2005 2006 2007 

Turnover – Thames 1,603 1,680 N/A N/A N/A 

Turnover – Europe & ROW [1] 2,335 2,264 N/A N/A N/A 

Turnover – Americas 1,914 1,801 1,878 1,702 1,601 

Total turnover 4,249 4,065 N/A 1,702 1,601 

Operating profit – Thames 1,218 612 687 N/A N/A 

Operating profit – Europe & ROW 169 311 238 N/A N/A 

Operating profit – USA 600 466 586 425 409 

Total operating profit 1,374 1,389 1,416 425 409 

Capital spending 6,129 1,465 1,405 1,588 696 

[1] Non BWI C&EE water activities were transferred to RWE energy. These generated revenues of 

some EUR100million in 2003. 

2006 and 2007 are net of Thames Water. 

In 2007, all water activities were classified as discontinued operations. No separate information is 

provided about RWE’s water activities. 

RWE, breakdown of populations served 


Germany 11,500,000 6,200,000 13,200,000 

Hungary 1,500,000 50,000 1,550,000 

Croatia 0 750,000 750,000 

Poland 135,000 135,000 135,000 

Albania 450,000 350,000 450,000 

Azerbaijan 50,000 0 50,000 

Mauritius 0 200,000 200,000 

Namibia 0 80,000 80,000 

China 0 2,300,000 2,300,000 

Puerto Rico 1,600,000 0 1,600,000 

USA 16,400,000 2,820,000 17,500,000 

Canada 420,000 0 420,000 

Total - home markets 11,500,000 6,200,000 13,200,000 

Total – international 20,555,000 6,685,000 25,035,000 

Grand total 32,055,000 12,885,000 38,235,000 

Germany 

RWE Aqua is responsible for the water business of RWE in Germany, Hungary and Poland and the 

international activities managed by Berlinwasser. In 2000, it was split from RWE Umwelt and merged 

with Thames Water, then in 2003 it was merged with the rest of RWE Energy. RWE Aqua gained the 

Budapest water concession in 1997 and acquired 22.5% of Berlin Water in 1999. Budapest was held 

jointly with Suez and the latter jointly with VE. RWE Aqua had a total turnover of EUR808million in 

2000 due to the Berlin Water acquisition. 

247 


GERMANY 


Stakes held by RWE Aqua account for 13.2million people in ten German states. Berlin and Essen 

have stakes in the following entities: Hastrabau (Langenhagen), SEG (Schwerte), Ruhrwasser 

(Essen), WVN (Essen), MKW (Frankfurt), WRH (Ludwigschafen), envia aqua (Chemnitz) and W&A 

Holzland (Hermsdorf), DAR (Aachen, Trier, Weisbaden, Mannheim and Berlin) and ARGE (KRW 

(Neuweid), KAWAG (Ludiwigsburg) and LEW (Augsburg). 

RWE Aqua acquired the majority stake in RWW (Rheinisch-Westfälische Wasserwerks-gesellschaft 

GmbH) in Mülheim an der Ruhr in April 2002. RWE was one of the founding members of RWW in 

1912 with a 14.3% stake, which was increased to 74.9% in 2002. It was agreed with the municipal 

shareholders to keep the current water tariff stable until 2005. RWW has responsibility within RWE 

Aqua for North Rhine Westfalia, Rhineland Palatinate, Belgium, the Netherlands and Luxembourg. In 

September 2002 RWE Aqua acquired an additional 4.8% in RWW. RWW serves 1million people and 

had a turnover of EUR77million in 2001. The stakes cost a combined EUR233million. 

Berliner Wasserbetriebe 

Y/E 31/12 (EURmillion) 2003 2004 2005 2006 2007 

Domestic revenues N/A N/A N/A 1,123 1,117 

International revenues N/A N/A N/A 19 17 

Services revenues N/A N/A N/A 5 5 


Net profit 116 62 85 89 150 

Water sales (million m 3 ) 214 201 197 202 193 

Sewage treated (m m 3 ) 230 232 227 231 N/A 

BWB dates back to 1856, including 45 years with its services being divided by the Berlin Wall. In 

1999, after the partial privatisation of BWB, Berlinwasser Holding AG was formed and BWB was 

vested into this company. The consortium (VE 50.1% and RWE 49.9%) acquired 49.9% of BWB for 

EUR1.69billion, with the majority 50.1% stake being held by the City of Berlin. 

1999 Berlin 30 year concession 3.9million water and sewerage 

BWB serves 3.4million people in Berlin, operating nine water treatment works and six sewage 

treatment works. In addition water is provided to 90,000 people and wastewater treatment to 

0.5million in Brandenburg via 10 water and 24 wastewater contracts with a total of 113 local 

authorities. 

The sale by VE and RWE of 80% of Berlinwasser International to Marubeni in 2005 was rescinded in 

2006 and in 2007 BWB decided to continue developing these activities. 

International contracts directly held by RWE 

Croatia 

2000 Zagreb 26 year BOT 0.75million sewage treatment 

This is the largest sewage treatment concession award in central and Eastern Europe to date, 

involving EUR270million in capital spending. The project scope includes design, construction and 

operation of the wastewater treatment plant (1million PE) and the administration facilities, 

construction of the main collecting pipeline (9.8km) and coverage of main drainage canal (5.5km). 

The concession company, Zagrebacke otpadne vode d.o.o (ZOV), is formed by RWE Aqua (48.5%), 

WTE Wassertechnik GmbH (48.5%, see EVN, Austria) and the City of Zagreb (3%). Construction 

began in July 2002 and was completed between 2004 (mechanical treatment) and 2006 (biological 

treatment). 

248 


GERMANY 


Poland 

2002 Gornicza 25 year concession 135,000 water & sewerage 

RWE acquired a 34% stake in PwiK, the municipal supplier for Dabrowa Gornicza in Silesia. The 

contract runs for 25 years. The partnership between RWE Aqua and the city of Dabrowa Gornicza is 

the first project for RWE Aqua in Central & Eastern Europe and at the time also only the third 

privatisation project in the Polish water market. Sewage treatment coverage will be extended from 

30% to 100%. 

Berlinwasser International 

The sale by VE and RWE of Berlinwasser International to Marubeni in 2005 was rescinded in 2006. 

Berlinwasser International AG (BWB) was set up by Berlinwasser in 1994 and therefore predates the 

concession award to RWE and Veolia in 1999. BWB gained its first contracts in 1997-98 and currently 

has nine projects in five countries with a total order backlog worth EUR495million in 2003. 

Hungary 

1997 Budapest 25 year O&M 1.5million water distribution 

Suez and RWE Aqua control all the shares of the management company and 25% of the equity of the 

asset management company. The management company formed by Suez (51%) and RWE Aqua 

(49%) took a 25% stake in Fövarosi Vizmuvek for USD82million. RWE holds 13% of the asset 

company. FV has a USD80million turnover and employs 1,500 staff. RWE subsequently transferred 

its shareholding into BWI. 

1997 Hodmézövásarhely 25 year concession 50,000, sewerage 

Zsigmondy Bela Rt. Manages the concession agreement with the city of Hodmézövásarhely. A 

wastewater treatment plant with a capacity of 30,000m³ per day has been upgraded to comply with 

the UWWTD. 

Azerbaijan 

2002 Imishli 10 year O&M 50,000, water 

BWI is responsible for the management of the city’s water services and owns 75% of the operating 

contract. The well network was rehabilitated in 2001 prior to the contract’s commencement. Water 

provision improved from 2 hours per day to 15 hours per day by 2003. In 2003, 57% of tariffs were 

collected, rising to 75% by 2005. 

China 

The 1997 20 year BOT for a waterworks serving Xian was sold in 2003 after legislatory change 

prevented the fixed rate of returns in contracts run by international companies. BWI’s 35% stake in 

Waterworks Xian South Co., Ltd, to the majority shareholder, the water enterprise of Xian, China for 

USD11.2million. 

249 


GERMANY 


2004 Hefei 23 year TOT 1.1million, sewerage 

The WangXiaoYing 310,000m 3 per day facility was built by the municipality between 1998 and 2002 

and BWI took over its operation in December 2004. Hefei Wang Xiao Ying Sewage Treatment Co., 

Ltd. is 80% held by BWI and 20% by East China Engineering Science & Technology Co. Ltd in a 

CNY480million contract. 

2003 Nanchang 20 year BOT 1.2million, sewerage 

The 330,000m 3 per day facility entered service in October 2004, built at a cost of EUR30million and 

handles a third of the city’s sewage. Nanchang QingShanHu Project Co. Ltd. is 80% held by BWI and 

20% by Third Construction & Engineering Co. Ltd. 

Namibia 

2002 Windhoek 20 year O&M 80,000 sewerage 

The contract (34% BWI, 34% Veolia & 33% VA Tech) covers a water reclamation facility at the city’s 

sewage treatment plant and provides 21,000m 3 of water per day, a third of the domestic water 

supplies for the city of 250,000. The turnover of Wingoc is approximately EUR2million pa. In addition, 

BWI has a five year O&M contract for the city of Swakopmund’s sewage treatment works, which have 

a capacity of 10,000m³ per day. 

Mauritius 

2008 St Martin 7 year O&M 200,000 sewerage 

The contract is 100% held by BWI and covers the management of a 70,000m 3 per day wastewater 

facility. 

Albania 

2003 Four Albanian towns 5 year O&M 450,000 water & wastewater 

BWI gained a five year EUR4million contract to take over management of water supply and 

wastewater disposal in the Albanian towns of Durres, Fier, Lezhe and Saranda. The project is 

supported by EUR20million in funding from the World Bank and will be implemented by a JV between 

BWI (60%) and Aquamundo (40%). Sewage treatment will be upgraded to secondary (biological) 

standards and water supplies will be improved from two to four hours daily to a 24 hour supply. 

BWI sold its 97.5% shareholding in the Elsaban concession, serving 80,000 people in 2006. 

American Water 

39.5% of American Water’s shares were sold by RWE in May 2008 for USD1.35billion. 

See company entry 


Name: RWE AG 

Address: Opernplatz 1, D-45128 Essen, Germany 

Tel: +49 201 12 00 

Web: www.rwe.com 

www.berlinwasser.de 

www.berlinwasser.com 

Dr. Jürgen Großmann (President and CEO) 

Dr. Klaus Sturany (Vice President, financial control) 

250 


ITALY 

PART 3(i): COMPANY ANALYSIS MAJOR PLAYERS – ACEA 

ACEA (AZIENDA COMNUALE ENERGIA e AMBIENTE SPA) 

Azienda Comunale Energia e Ambiente (ACEA), the municipality serving electricity and water 

services to the city of Rome, was partially floated in February 1999. 51% of the equity is held by the 

municipality of Rome, 8.9% by Suez Environnement and the rest by a variety of private and 

institutional investors. A further share sale by the municipality may be considered. The company was 

founded in 1909 for electricity distribution, started water provision services as AGEA in 1937 and was 

renamed ACEA in 1945. ACEA is Italy’s largest water and electricity utility. The company believes 

that it provides the best quality drinking water in Italy at one of the lowest prices for a major city in 

Europe. In August 2007, merger talks began between ACEA and Iride, the utility which merged with 

AMGA in 2006. 

ACEA, profit and loss account 

Y/E 31/12 (EURmillion) 2003 2004 2005 2006 2007 

Rome-Water billed (million m 3 ) 408 432 438 442 447 

Other ATOs-Water billed (million m 3 ) N/A N/A N/A 226 276 

Wastewater billed (million m 3 ) 455 459 473 485 476 

Turnover 1,481.1 1,413.0 1,624.4 2,187.3 2,583.3 

Water EBITDA N/A 152.9 170.6 206.7 212.8 

Operating profit 147.8 210.5 232.6 290.5 323.4 

Net profit 49.0 112.3 127.9 147.4 173.4 


Water related capital spending rose from EUR83.9million in 2005 to EUR119.1million in 2006. Water 

billed for other regions in 2006 was for 213million m 3 . 


Italy 7,910,000 9,110,000 9,110,000 

Peru 800,000 0 800,000 

Honduras 495,000 495,000 495,000 

Columbia 3,900,000 0 3,900,000 

Total - home markets 7,910,000 9,110,000 9,110,000 

Total – international 5,195,000 495,000 5,195,000 

Grand total 13,105,000 9,605,000 14,305,000 


Italy 

Through a series of contract gains for ATOs, ACEA is now the leading water and wastewater 

company in Italy. Current year targets for building upon ACEA’s presence in western Italy are ATO1 

(Lucca), ATO2 (Perugia) and ATO3 (Rieti). 

ACEA is seeking to merge the Florence, Pisa and Siena-Grosseto ATOs into a single entity serving 

3.3million people in Tuscany. 

ACEA: Activities in Italy, 2008 

Contract Stake City 


served 

Water billed 

(million m 3 ) 

ATO 1 29% Lazio-Centrale 3.37 447 

ATO 5 94% Frostione 0.43 26 

ATO 6 80% Siena-Grosetto 0.37 26 

ATO 2 45% Pisa 0.72 57 

ATO 3 85% Firenze 1.20 90 

ATO 3 90% Sarnese Vesuviano 0.70 N/A 

SIGESA 100% National 2.40 N/A 

251 


ITALY 


In the medium term, ACEA aims to gain contracts for a further 2.2million people via the ATO process 

and to gain some 17% of the Italian water and sewerage market (9.8million people) by 2012, with 

total water delivered rising from 655million m 3 in 2006 to 979million m 3 in 2012. The corporate 

business plan is based on gaining additional ATOs in western Italy and becoming the dominant 

regional player. 

The Tuscan ATOs are currently being merged. 

Regulated activities 2005 2008 

ATO2 – Lazio Million m 3 438 527 

Other ATOs Million m 3 159 304 

EBITDA EURmillion 165 229 

Rome 

In 1999, 2.8million people were served with water services and 2.2million with sewerage services. 

This currently stands at 3.37million people through ACEA ATO 2, a 30 year concession between 

ACEA (96%) and 111 councils (4%) in the ATO2 Lazio region that started in January 2003 and a 

series of additional contracts. 

Y/E 31/12 (EURmillion) 2004 2005 

Water provision 22.85 23.52 

Sewerage 33.77 33.41 

Water maintenance services 1.29 1.23 

Monumental fountains service 1.59 1.59 

Urban water services 7.24 6.21 

Concession fee 17.20 17.87 

Expansion has been achieved through taking on services for neighbouring municipalities: 

2003: Starting with the municipalities of Rome, Monterotondo, Tivoli, Guidonia-Montecelio, 

Grottaferrata, Ciampino and Fiumicino, the Simbrivio Consortium, was taken over, a system that 

supplies water on a wholesale basis to 45 municipalities and 2 consortia. 

2004: The municipalities of Castel Madama, Mentana, Fonte Nuova, Marcellina, San Gregorio da 

Sassola, Ciciliano, Pisoniano, Rocca Santo Stefano, Montelanico and Albano Laziale, along with a 

wholesale water system from a consortium set up by the former Southern Italy Development Fund 

and previously managed by Lazio Regional Authority, which services Pomezia, Ardea and Lanuvio. 

2005: The municipalities of Casape, Carpineto Romano, Sambuci, Affile, Arcinazzo Romano 

(excluding the CO.RE.CALT. Consortium) Gavignano, Gorga, Cervara di Roma, Subiaco, Castel 

Gandolfo, Vicovaro, Artena, Trevignano Romano and Santa Marinella. 

2006: Doganella Consortium’s aqueduct system serving the municipalities of Palestrina, Zagarolo, 

Colonna and San Cesareo and the system serving the municipalities of Bellegra, Roiate, San Vito 

Romano, Castel San Pietro Romano and Gallicano. Waste water and sewerage services in the 

municipalities of Capranica Prenestina and Olevano Romano, where drinking water services are 

managed by another operator. Water services in the municipalities of Poli, Genazzano and Rocca di 

Cave from March 2007. Services in the municipalities of Fiano Romano, Jenne, Nemi (drinking water 

services only), Vejano, Segni, Saracinesco, Lariano, Lanuvio, Sacrofano, Tolfa, Allumiere, Pomezia 

(provisional management of sewerage and water treatment services), Sant’Oreste, Nazzano and 

Castelnuovo di Porto. 

2007: Rocca di Cave, Poli and Genazzano (water, having already held their wastewater contracts) 

and Torrita Tiberina, Riano, Marino, Oriolo Romano and Ponzano Romano (water and wastewater). 

A water and wastewater contract for Cerveteri became operational in February 2008. 

252 


ITALY 


To date, 74 municipalities have opted for ACEA’s services in the region, accounting for 94% of the 

addressable population, or 3.37million people. 

Subsequent ATO awards 

2003 Frosinone ATO privatisation 430,000 water & wastewater 

In April 2002, a consortium led by ACEA gained a 30 year concession for the Frosinone ATO 5. 

ACEA holds 65% of the consortium, with CREA being one of the secondary investors. The 

concession covers 430,000 people (182,000 customers). EUR361.5million will need to be invested 

during the concession’s life. The concession entered into service in October 2003 and covers 86 


Three ATOs were gained in Tuscany by a consortium lead by ACEA and also featuring Ondeo. With 

ACEA and Ondeo controlling services for 2.7million out of the 3.5million people living in Tuscany, a 

rationalisation of these concessions is planned. 

2002 Pisa ATO privatisation 720,000 water & wastewater 

A 45% stake in Acque SpA (AI) was acquired for EUR19.2million. AI is Tuscany’s ATO-2 Basso 

Valdarno, serving 57 communes. The 20 year concession will generate EUR1.2billion in revenues. 

2003 Siena/Grosetto ATO privatisation 373,000 water & wastewater 

A 40% equity stake in the Acquedotto de Fiora was acquired by the ACEA led consortium for 

EUR19.3million, with a concession life of 25 years. ATO-6 Ombrone covers 56 communes and 

required some EUR433million in capital spending. 

2003 Florence ATO privatisation 1,200,000 water & wastewater 

The ACEA led consortium has acquired 40% of Publiacqua SpA, the holder of the 20 year concession 

to operate water and wastewater services for 50 communes in Tuscany’s ATO-3 Medio Valdarno. 

Publiacqua had a turnover of EUR104million in 2002 and net profits of EUR8million. The consortium 

is contributing EUR60million towards the EUR150million capital increase, with the municipalities 

paying the remaining EUR90million. In conjunction with the privatisation, EUR300million of 

Publiacqua’s revenues were securitised in order to pay for the capital increase and to retire mature 

debt. ACEA is currently in talks to acquire 40% of ASA SpA, Tuscany’s ATO-5 Toscana Costa- 

Livorno. ASA provides water to 359,000 in the Livorno municipality. 

2005 Sarnese Vesuviano ATO privatisation 700,000 water & wastewater 

A 30 year concession awarded to Campania-Gori SpA, serving part of Naples. 

Acquisition of SIGESA 

ACEA acquired SIGESA (Società Italiana Gestione Servizio Ambientale) for EUR21.4million in June 

2005 and the acquisition was consolidated on 1 st January 2006. SIGESA was founded by 

Bouygues/SAUR in 1986 and acquired the water services activities of Fiat SpA in 1998 along with 

71% of Crea in February 2000 (the remaining 29% being held by Italmobiliare SpA). The acquisition 

valued Crea at EUR67million. Crea supplies water to 13 regions. In 2003, SAUR acquired 26.5% of 

Umbria Acque the ATO serving 460,000 people in the city of Perugia. Other activities are in Lucca, 

Rieti and Benevento. 

Population served (million) Sigesa Crea Combined 

Water 0.35 0.85 1.20 

Wastewater 0.45 1.85 2.40 

253 


ITALY 


Turnover increased from EUR21million in 1999 to EUR48million in 2000 and EUR58million in 2001. 

Consolidated revenues were EUR30.7million in 2004 after the divestment of the gas activities. ACEA 

acquired SIGESA for EUR19million in July 2005, a purchase price of EUR2million and the 

assumption of EUR17million in liabilities. 

Sale of Acqua Italia to Amga 

In November 1999, ACEA set up Aqua Italia SpA (AI), a 67:33 venture with Impreligio SpA. In 2000, 

AI acquired majority stakes in Acquedotto de Ferrari Galliera (ADF, 67%) and Acquedotto Nicolay 

(AN, 53%), two of the three listed water companies in Italy prior to the emergence of the municipal 

multi-utilities. Both companies serve the city of Genoa (see their respective company entries). ACEA 

has also acquired 3.7% of Amga's (see relevant company entry) equity. All three companies provide 

water services to the city of Genoa. In July 2005, ACEA sold its stake in Acqua Italia to Amga SpA for 

EUR61million and the assumption of EUR10million in debt. Acqua Italia has revenues of 

EUR20million in 2004, and a net income of EUR3million. 

International activities 

In July 2004, ACEA announced that while it would retain its existing water activities, it would not be 

seeking new international contracts. ACEA’s Yerevan contract was completed in 2005 and VE gained 

a subsequent contract serving that city. ACEA’s international activities had revenues of 

EUR15.8million in 2005 (2004; EUR12.9million) and an operating profit of EUR3.1million (2004; 

EUR2.2million). 

Albania 

2001 Tirana Acque 4 year management 650,000 water 

ACEA holds 40% of Tirana Acque, an Italian consortium developed to take advantage of bilateral 

agreements between Italy and Albania. The contract is worth EUR10.5million. The longer-term aim is 

to be involved in the privatisation of Greater Tirana Water Supply and Sewerage. 

Honduras 

2000 San Pedro 30 year concession 495,000 water & sewerage 

The concession was awarded to Aguas de San Pedro in August 2000 and entered service in 

February 2001, with ACEA holding 31% of the consortium’s equity. Service targets are for 100% 

water coverage in three years and 100% sewerage coverage within five. USD135million of investment 

is planned during the life of the concession. 

Peru 

2000 Cono Norte 27 year concession 800,000 water 

ACEA (Consorcio Agua Azul SA, 45%) teamed with Impregilo SpA (40%), Fisia Utalimianti SpA (5%) 

and Castalia & Cosapi SA (10%) of Peru for the Cono Norte concession that was awarded to Agua 

Azul SA in January 2000. After two years constructing a new water treatment works for USD50million, 

the operating contract runs for 25 years. Cono Norte is part of the city of Rio Chillon. Its population is 

currently 750,000 but is expected to rise to 2,000,000 by the end of the concession. The concession 

involves the supply of 44million m 3 of water pa at PEN2.8million/month (USD0.8million) and involves 

USD80million in capital spending. 

Colombia 

Operations are carried out through ACEA’s 51% held Aguazul Bogota. 

2003 Bogota 5 year O&M 2,500,000 water 

254 


ITALY 


The contract is with the municipality’s Empresa de Acueducto y Alcantarillado de Bogotà (EAAB) and 

covers 45% of the city’s population, based in zones 2 and 5. The contract has an annual turnover of 

USD10million. 

2003 Santo Dominigo 4 year O&M 1,400,000 water 

The contract is with the municipality’s CAASD. It will run for a minimum of four years and is 

renewable. 


Name: ACEA SpA 

Address: Piazzale Ostiense 2, 00154 Rome, Italy. 

Tel: +390 6 57 991 

Fax: +390 6 57 994 146 

Web: www.aceaspa.it 

Fabiano Fabiani (Chairman) 

Andrea Manzoni (CEO) 

Isadora Lucciola (CFO) 

255 


SPAIN 

PART 3(i): COMPANY ANALYSIS MAJOR PLAYERS – AGUAS DE BARCELONA 

AGUAS DE BARCELONA SA 

Sociedad General de Aguas de Barcelona SA (Agbar) is under the indirect control of Suez. In 2007, 

Suez, La Caixa, and HISUSA (51% Suez Environment, 49% Caixa Holding), which jointly owned 

49.7% of Agbar, launched a public tender offer for Agbar’s outstanding shares. As of July 2008, Suez 

held 12% of Agbar directly and HISUSA held a further 64%, with Suez Environnement holding 45.9% 

of Agbar’s shares. Suez plans to increase Agbar’s free float from 10% to 30-33% in the medium term. 

Agbar dates back to the Compagnie des Eaux de Barcelone founded in 1867 and incorporated in 

Paris as La Societé Générale des Eaux de Barcelone, in 1881, before being acquired by Catalan 

investors and incorporated in its current form in Barcelona in 1919 for the provision of water and 

sewerage services in Barcelona. Until 1985, Agbar along with FCC enjoyed an effective duopoly of 

Spanish private sector water and sewerage contracts across Spain. Since then, several Spanish 

construction companies and electricity utilities have entered the market, and in several cases have 

subsequently sold these activities. 

In June 2006, Agbar acquired Bristol Water, the largest independent Statutory Water Company in 

England and Wales for EUR256.8million. 

Agbar, profit and loss account 

Y/E 31/12 (EURmillion) 2003 2004 2005 2006 2007 

Water turnover 892.7 1,057 1,204 1,427 1,563 

Group turnover 2,676.5 2,589 2,749 2,579 2,861 

Water operating profits N/A 131 184 250 265 

Group operating profits 183.0 238 303 330 371 

Water net profit N/A 173 185 N/A N/A 

Net profit 243.0 266 338 308 483 

Minority interests -48.7 -50 -86 141 131 

Group net profit 194.3 216 252 167 353 


2006 & 2007 results reflect the disposal of Applus 

Agbar, services in 2006 

Water Spain International 

Municipalities served 1,131 75 

Population served 12,347,431 9,050,179 

Customers served 5,741,611 1,924,171 

Water treatment plants 211 34 

Water delivered (million m 3 pa) 1,274 795 

Treatment capacity (m 3 /day) 2,430,775 2,996,434 

Sewerage 

Municipalities served 355 49 


Sewer systems (km) 17,811 9,980 




Capacity (m 3 /day) 1,845,495 1,008,143 

256 


SPAIN 


Agbar, services in 2007 

Water Spain International 

Municipalities served 1,205 68 


Customers served 6,089,018 3,218,328 

Water treatment plants 223 38 

Water delivered (million m 3 pa) 1,319 1,332 

Treatment capacity (m 3 /day) 2,496,143 3,285,216 

Sewerage 



Sewer systems (km) 20,645 13,960 




Capacity (m 3 /day) 2,495,853 1,215,094 

Operating margins have consistently been higher than for the company’s other activities, with an 

internal rate of return of 15% for most recent contracts. Agbar expects to devote 65% of its capital 

expenditure on water and sewerage services in the medium term. 

Spain 

Excepting Barcelona, Agbar’s water and sewerage contracts in Spain have an operating life ranging 

from 5 to 30 years. The company provides sewerage services for 8million people and 10million have 

their sewage treated. Agbar holds 52% of the private sector’s share of the water provision market in 

Spain. Currently municipalities hold 48% of the market, which is being steadily eroded by 

privatisations. Agbar serves 1,368,911 customers in the Barcelona metropolitan area, a total of 

2.815million people. In 2006, the Alicante concession, serving 725,000 people, was extended from 

2016 to 2036. 

Agbar has some 2,100 water, sewerage and sewage treatment contracts in Spain, ranging from 

serving 1,000 to 2.8million people. In 2007, 21 new water concessions were gained (44,000 people, 

including Santa Cruz de la Palma, in the Canary Islands for 17,640 inhabitants) and 59 contracts 

renewed (213,000 people, including Benidorm, in Alicante (67,500) and Ripollet, in Barcelona (34,700 

inhabitants)). 23 sewerage contracts were renewed or gained, serving 159,000 people, including a 

new contract for Ciudad Real (71,005). 41 wastewater treatment plant management contracts were 

awarded, with a PE of 285,000, including a new contract for Xátiva, in Valencia (28,000 inhabitants) 

and the renewal of the contract for Mahón, in the Balearic Islands (27,000 inhabitants); and ten 

wastewater treatment plants currently managed by the Gran Canaria Island Council for 30,000 

equivalent inhabitants. 

Acquisition of Ferrovial’s water and wastewater activities 

In July 2004, Ferrovial sold its water activities to Agbar for EUR43.3million. These consist of 14 

concessions for water and wastewater services to 217,480 people in 32 municipalities, rising to 

450,000 during the summer. Contracts for some 50,000 people were gained during 1998 and 1999 

and for a further 150,000 during 2000. This business was mainly built up between 1998 and 2000 and 

consists of 130,000 customer accounts generating revenues of EUR16.3million in 2003. The main 

towns served with water or wastewater by Ferroser are: Ponferrada and San Andrés del Rabanedo 

(Castilla-León), Estepona, Ubeda and Vélez Blanco (Andalucía), Poio and O Barco de Valdeorras 

(Galicia), Plá de Mallorca (Balearic Islands), Guadalemar (Extremadura), and Castañeda and Cartes 

(Cantabria). 

Partial sale of Aguagest Sur 

50% of Aquagest Sur was sold to Unicaja and Caja Granada in July 2005 for EUR73.5million. Agbar 

will retain the rest of the company’s equity. Aguagest Sur was founded in 1991 and is responsible for 

water and sewerage services for 43 municipalities in Andalusia, serving 1,194,535 people. 

257 


SPAIN 



Until recently Agbar sought major contracts in Latin America in partnership with Suez but now Agbar 

operates on its own. Likewise, as demonstrated by the Bristol Water acquisition, the group is seeking 

opportunities in markets outside Latin America. Two small stakes in the USA (10% of Western Water) 

and Morocco (5% of Lydec) have been sold. 

Agbar, number of people supplied in Spain and internationally 


Spain 12,171,598 13,380,000 15,000,000 

United Kingdom 1,092,000 0 1,092,000 

Chile 6,591,116 6,468,873 6,591,116 

Colombia 895,000 895,000 895,000 

Cuba 1,272,414 1,272,414 1,272,414 

Mexico 711,188 711,188 711,188 

Algeria 1,500,000 0 1,500,000 

China 1,250,000 1,200,000 2,450,000 

Total outside Spain 13,311,718 10,547,475 14,511,718 

Global Total 25,483,316 23,927,475 29,511,718 

Since 2005, the company has reviewed its activities in Latin America and has withdrawn from 

Argentina, Uruguay and Brazil. The company remains committed to Chile and Cuba, but all other 

activities remain subject to review. 

United Kingdom – Bristol Water 

The Bristol Waterworks Company (Bristol Water) was founded in 1846. Bristol Water supplies water to 

1,066,000 people in the city of Bristol in western England and certain surrounding areas. Sewerage 

services are carried out by Wessex Water (YTL). Veolia Environnement’s 24.7% holding was sold to 

the Ecofin Water & Power Opportunities Fund Plc in 2002 for GBP38million. In April 2001, Bristol 

Water and Wessex Water set up a JV to combine their customer services and billing operations. 

Bristol Water Plc is 100% held by Bristol Water Group Plc, the successor company to Bristol Water 

Holdings Plc set up in September 2003 which operates the company’s non-regulated activities. By 

May 2005, all non regulated activities with the exception of some joint ventures had been divested. 

Bristol Water Group, profit and loss account 

Y/E 31/03 (GBPmillion) 2004 2005 2006 2007 2008 

Bristol Water Plc 70.7 70.6 81.9 86.3 91.0 

Other activities 42.8 27.9 0.0 0.0 0.0 

Group turnover 113.5 98.5 81.9 86.3 91.0 


Pre-tax profit 14.5 1.6 18.4 18.9 17.9 

In December 2003 Bristol Water announced a refinancing to increase in the level of borrowings in the 

regulated water business and a return of GBP51million to shareholders. A second round of refinancing 

was completed in June 2005, returning a further GBP30million. Agbar made a GBP175million agreed 

bid for Bristol Water in April 2006, which was declared unconditional in May 2006. 

Argentina 

Agbar’s has exited from its activities in Argentina. 

Aguas de Santa Fe was meant to be sold to Fides Group and Grupo Energia BV in 2005, but in May 

2005 Suez and Agbar decided to terminate the concession. The Aguas Argentinas concession serving 

Buenos Aires was ended in March 2006. The Aguas Cordobesa concession (Ondeo Services 39%, 

Agbar 17% and five Argentinean companies) was partly sold in December 2006; Agbar selling 12% to 

Roggio and retaining 5%. 

258 


SPAIN 


Chile 

Agbar holds 50.1% of the equity of Aguas Andinas via Inversiones Aguas Metropolitanas Limitada 

(IAM). In 1999 Agbar and Suez acquired 51.2% of Empressa Metropolitana de Obras Sanitarias 

(EMOS, now Aguas Andinas), Santiago’s water supply company, for a total of USD1,135million. In 

2002, Agbar’s stake was increased from 16.0% to 25.6% through the exercise of a call option at a cost 

of EUR180million. In 2004, Agbar bought 30.1% of Suez’s holding in IAM for EUR139.4million. As a 

result, Agbar owns 80.2% of IAM, with Suez holding the remaining 19.9%. IAM was listed on the 

Santiago Stock Exchange in January 2007, with IAM holding 50.1% of the company, CORFO (Chilean 

Government) 35.0% and a free float of 14.9%. 

1999 Santiago Privatisation of EMOS 5.8million water & sewerage 

All 44 districts of the city are to be covered, along with the long-term development of its wastewater 

services. Revenue growth is being driven by wastewater services expansion. Currently, 100% of the 

population is served with piped water and 97% by mains sewerage, while 75% of sewage effluents are 

treated. 

Enersis sold Aguas Cordillera to EMOS for USD193million in June 2000.The second highest bidder 

was Biwater at USD179million. Aguas Cordillera provides water and sewerage services to 116,591 

clients (315,000 people) in the Vitacura, Las Condes and Lo Barnechea districts of Santiago. Aguas 

Cordillera has been integrated within Aguas Andinas. 

Aguas Andinas, profit and loss account 

Y/E 31/12 (CLPmillion) 2003 2004 2005 2006 2007 

Water revenues 111,015 109,112 111,955 115,386 115,886 

Sewerage revenues 66,079 83,287 97,991 105,546 106,032 

Other – regulated 9,754 8,131 9,939 10,059 8,007 

Other – non regulated 9,285 13,821 15,992 18,331 23,831 

Turnover 168,398 195,433 219,623 249,322 253,756 

Operating profits 87,242 94,999 111,301 112,221 121,314 

Net income 69,456 71,022 83,278 90,884 97,059 

EPS (CLP) 9.75 10.21 12.41 13.55 14.47 

2003 2004 2005 2006 2007 

Water clients (‘000) 1,436 1,467 1,503 1,550 1,598 

Sewerage clients (‘000) 1,405 1,438 1,474 1,521 1,569 

Water coverage 100% 100% 100% 100% 100% 

Sewerage coverage 98% 98% 98% 98% N/A 

Sewage treatment coverage 63% 67% 69% 72% N/A 

1995 Valdiva Concession 120,000 water & sewerage 

The concession was awarded to Aguas Décima SA. 120,000 people are served via 26,000 client 

contracts for water and 21,500 for sewerage. The first objective for the concession is to connect the 

outstanding 4,500 customers to the sewerage service. 

2008 ESSAL Acquisition 650,000 water and sewerage 

Iberdrola’s Iberener acquired 51% of Empresa de Servicios Sanitarios de Los Lagos SA (ESSAL) from 

the Chilean Government for USD94million in 1999. 35% of ESSAL is now held by the Government and 

10% by its staff. ESSAL is one of Chile’s smaller water companies and is based in Region X in the 

south of the country ESSAL serves 166,000 customers (650,000 people, against 500,000 in 1999) in 

the Region, which includes the cities of Osorno and Puerto Montt, with a population growth of 6% pa. 

USD240million in investments is called for, to increase the number of water connections within its 

operating area and to develop sewerage services and sewage treatment facilities, with the aim for 

universal sewerage and sewage treatment by 2005. Aguas Andinas acquired ESSAL’s holding for 

CLP72.5billion in March 2008. 

259 


SPAIN 


Uruguay 

Agbar acquired 60% of Aguas de la Costa at the end of 1997. The company sold this stake back to 

the Government’s OSE in 2006 for USD3.4million, part of which was in turn acquired by two local 

companies STA Ingenieros (30%) and Benencio SA (10%). 

Brazil 

Agbar gained the concession to operate water and wastewater services for Campo Grande in 2001. In 

2005, Agbar sold its 50% stake in Aguas Guariroba to a consortium formed by Bertin and Equipav 

(See company entry for Grupo Equipav SA), who also acquired 31% from Copel. Aguas sold its stake 

for BRL57million. 

Colombia 

1995 Cartagena 25 year concession 895,000 water & sewerage 

Aguas de Cartanega SA ESP has been profitable since its onset. 44.8% of its shares are held by 

Agbar, 50% by Distrito Turistico y Cultura de Cartagena and 5.1% by local shareholders. Agbar’s 

stake cost COP280million. In 2007 water coverage was 100% against 73% in 1995, with sewerage 

coverage at 82% against 61%. The aim is for 95% water coverage by the end of 2008. Water services 

have been provided to 350,000 people since the concession started (93% urban poor) and sewerage 

services to 240,000 (90% urban poor). Aguas de Cartagena has 132,000 water customers and 

102,000 sewerage customers. In 2006, Agbar agreed to continue running the concession after 

consultations with the city. During 2005, net profits eased by 8.9% to COP7.77billion, with a 6.0% 

increase in revenues to COP96.3billion. 

Cuba 

Interagua formed Aguas de La Habana, a JV with the Cuban Government in 1999, for two water 

management contracts currently serving 1,200,000 people, with an eventual coverage of 1,400,000 

people. The contract serves La Havana and Varadero. Water supply systems were renovated for 

298,000 people in 2001-02. In February 2000, Interagua was awarded a 25 year water management 

contract for Havana. 

Service development in Varadero and Havana 

Varadero 1994 2006 




Havana 2000 2006 




Source: Presentation by José María Tura, General Manager of Aguas de La Habana to Agbar 

conference “Five international examples of environmental management in the service of the citizens” 

on 19th June 2007. 

Mexico 

2001 Saltillo 25 year concession 711,188 water & sewerage 

Agbar has gained 49% of Empresa Paramunicipal, the company responsible for the management of 

the drinking water supply and sewerage services in the city of Saltillo, in the state of Coahuila situated 

in northern Mexico. The remaining 51% is to be held by Sistema Municipal de Aguas de Saltillo 

(SIMAS). The city of Saltillo was founded in 1577. In 2004, water was supplied to the entire population 

(146,245 customers), with 92% served by sewerage. During 2005, the sewerage network will be 

completed. Turnover was EUR21million in 2001. EUR81.9million is to be invested during the contract. 

7,000 customers were gained during 2007. 

260 


SPAIN 


Algeria 

In November 2007 Agbar gained a concession for water supply and treatment in the province of Orán 

for a term of five and a half years. Orán, located in the north east of Algeria on the Mediterranean 

coast, has a population of 1.5million inhabitants and after the capital, Algiers, is the second largest city 

in the country. Société des Eaux Oran, SPA, is 50% held by Agbar and 50% by the Government’s 

Algérienne des Eaux y el Offi ce National de l’Assainissement. 

China 

The Agbar Group is operating a series of water supply and wastewater treatment projects in the 

province of Jiangsu, through a joint venture with the Golden State Water Group Corporation Group, 

including Chinese capital in which the Merrill Lynch Group also has a stake. November 2007 entailed 

a EUR30million investment by Agbar, including EUR14.45million for Agbar’s 49% stake in the joint 

venture company. 

The joint venture will be responsible for three 30-year concessions: the management of a waste water 

treatment plant (with capacity of 300,000m 3 /day) in Nanjing; the construction and management of a 

potable water treatment plant (350,000m 3 /day) in Taizhou, and the management of another potable 

water treatment plant (50,000m 3 /day) and the related distribution network in Xuyi. 

See company entry for the Golden State Water Group. 


Name: Grupo Agbar 

Address: 

Torre Agbar, Avenida Diagonal, 211 

08018 Barcelona, Spain 

Tel: +(34) 93 342 20 00 

Fax: +(34) 93 342 26 70 

Web: www.agbar.es 

Jorge Mercader Miro (Chairman) 

Angel Simón (General Director) 

Juan Antonio Guijarro (Water, except Catalonia and Balearics) 

Leonard Carcolé (Water, Catalonia and Balearics) 

261 


UNITED KINGDOM 

PART 3(i): COMPANY ANALYSIS MAJOR PLAYERS – BIWATER PLC/CASCAL 

CASCAL NV 

Cascal specialises in investing in and operating water and wastewater systems. The company was 

formed in April 2000, and at the time brought together all of Biwater’s operational contracts in a single 

company (see company entry on Biwater). Cascal was originally a wholly owned subsidiary of the 

Biwater Group but in January 2008 some of its shares were floated on the New York Stock Exchange 

(NYSE). 

Cascal NV, profit and loss account 

YE 31/03 (USDmillion) 2004 2005 2006 2007 2008 

Water supply turnover 89.2 94.7 101.4 107.2 133.2 

Water contracting turnover 7.6 16.2 9.3 14.5 27.5 



Pre-tax profit 17.7 35.9 27.2 15.7 22.3 

Cascal NV, regional breakdown of revenues 

Year ended March 31 (USDmillion) 2006 2007 2008 

United Kingdom 67.9 75.1 94.8 

South Africa 13.4 13.8 21.7 

Indonesia 9.5 11.1 11.4 

China 0.0 2.9 10.0 

Chile 6.8 6.4 7.6 

Panama 0.0 6.2 8.8 

The Philippines 2.1 2.4 2.9 

Holding Companies 1.2 0.2 0.7 

Revenue from continuing operations 100.8 118.6 157.8 

Discontinued operations (Mexico & Belize) 9.8 3.1 2.9 

Total reported revenue 110.6 121.7 160.6 

Cascal, number of people served internationally 

UK 430,000 0 430,000 

Philippines 220,000 220,000 220,000 

Indonesia 730,000 0 730,000 

Chile 440,500 352,500 440,500 

Panama 300,000 0 300,000 

South Africa 404,000 404,000 404,000 

China 1,510,000 0 1,510,000 

Grand Total 4,034,500 976,500 4,034,500 

UK 

Bournemouth Water (founded in 1863) and West Hampshire Water (founded in 1893) were both 

acquired by Biwater in 1989 and merged in 1994. Bournemouth & West Hampshire Water (BWHW) 

was later transferred to Cascal when it formed in 2000. BWHW now has 197,000 connections, 

serving a resident population of 430,000 which rises to 500,000 in the summer. BWHW is 100% held 

by Cascal and has an operating licence in perpetuity, subject to 25 years notice of termination. The 

UK water sector is heavily regulated and controlled; in 2007 BWHW was ranked second for levels of 

service by the regulator. 

262 




Bournemouth and West Hampshire Water Plc financial highlights 

YE 31/03 (GBPmillion) 2004 2005 2006 2007 2008 

Water supply turnover 28.41 29.98 34.52 34.85 36.93 

Non-regulated turnover 2.31 2.81 3.06 4.67 9.73 



Pre-tax profit 8.65 9.94 -3.69* 10.95 10.91 

* GBP10.5million before exceptional items 

Meter penetration in 2007 reached 50% and is expected to reach 55% by 2009-10 following the 

installation of 26,860 meters. In 2005, the company refinanced its debt by issuing GBP65million of 

index linked wrapped bonds under the Royal Bank of Scotland’s Artesian programme. These bonds 

are repayable by 2033 and carry a coupon of 3.084%, with an inflation-related indexation charge on 

their principal value. 

Philippines 

1996 Subic Bay 30 year concession 220,000 water & sewerage 

The Subic Water and Sewerage Company Inc. (Subicwater) is a JV with local partners, serving Subic 

Bay Freeport and Olongapo City. Subicwater was established together with the Subic Bay 

Metropolitan Authority (SBMA) and the Olongapo City Government to undertake the project by means 

of a twenty five year concession contract (extended to 30 years in 2003), which is due to expire in 

2027 and has a 25 year extension option. 

Subicwater took over the operation and maintenance of the existing assets and is undertaking 

extensive refurbishment work, upgrading treatment works, pipework and rehabilitation and the 

extension of water distribution and sewerage networks. There are 32,000 water connections and 

70km of water mains and 50km of sewerage networks. 

Indonesia 

1995 Batam Island 25 year concession 700,000 water provision 

The Batam Industrial Development Authority (BIDA) awarded Cascal and its local joint venture 

partners, Bangun Cipta Kontraktor (BCK) and Syabata Cemerlang a 25 year concession contract in 

1995 to operate, manage and develop the water facilities on the island of Batam. The partners set up 

a local company, Adhya Tirta Batam (ATB) to fulfil their concession obligations. Cascal and BCK 

acquired the Syabata Cemberlang shareholding in November 2002 and now have equal shares in 

ATB. 

Batam Island has enjoyed exceptionally high investment and growth ever since it was designated a 

special development zone by the Indonesian Government. Non-revenue water has been reduced 

from 49% in 1995 to 27% in 2007. Further investment is being implemented to reduce non-revenue 

water to 25%, and even lower over the remainder of the concession period. Due to the high growth, 

water demand grew by 10% in 2002-03, with 69,000 customer connections. In 2003-04, connections 

rose by a further 18% to 81,000 and to 132,000 by 2008. Adhya Tirta Batam currently serves 700,000 

people. In May 2008, PT Adhya Tirta Batam undertook to construct a new water treatment plant in 

Duriangkang, along with approval for a 20% tariff increase. The new construction is the third stage in 

the development of an integrated potable water system and follows the completion of earlier modules 

built in 2001 and 2004. The new treatment plant will have a capacity of 11.5million gallons per day, 

equivalent to a population of almost 200,000, and is expected to commence operations in April 2009. 

263 




2008 Telang Kelapa 25 year concession 30,000 water provision 

Cascal holds 40% of PT Adhya Tirta Sriwijaya, which has a concession for water provision to 

Sukarame, an area near to Palembang, with a total population of 160,000. 

China 

The China Water Company (CWC) 

The China Water Company (CWC) was originally founded by AIDC, a company majority held by the 

Australian Federal Government. Thames Water Aqua International GmbH acquired 48.8% of CWC for 

USD20million, plus a USD50million capital injection in 2001. In November 2006, Cascal acquired 

87% of the China Water Company Limited from Thames Water, Sime Darby (Hong Kong) and two 

minority shareholders. 

China Water has offices in Hong Kong and Shanghai and it owns majority stakes in six water service 

companies in China which are based in Xinmin and Qitaihe (in the North), Yanjiao (near Beijing), 

Yancheng and Zhumadian in the middle of the country and Fuzhou (in the South East). The water 

service companies are all joint ventures with local water companies or development zones. 

2008 Yancheng 30 year concession 600,000 water provision 

In April 2008 Cascal acquired a 49% stake in Yancheng China Water Company. The new joint 

venture company, Yancheng China Water Company, a joint venture between China Water (49%) and 

the Municipality of Yancheng (51%), formally commenced operations in May 2008. Yancheng CWC 

operates three water treatment plants with a combined capacity of 235Mld supplying a network 

consisting of 925km of transmission and distribution mains, serving the entire population of the city. 

The company employs 592 staff. Due to increased demand from both residential and commercial 

customers the company is currently planning a further 100Mld expansion. 

2004 Fuzhou 35 year concession 150,000 water provision 

The Fuzhou CWC Water Company Limited contract is a 30 year concession which started in 

December 2004. Fuzhou CWC operates the water supply assets for the Fuzhou Economic & 

Technological Development Zone. Construction of the 125,000m 3 /day WTW ran from 2004 -2006. 

The facilities consist of two plants with a combined capacity of 125Mld and 93km of distribution 

network, which is mainly gravity fed. 

2000 Yanjiao 25 year BOOT 150,000 water provision 

The CWC Yanjiao (Hebei Province) contract covers a water treatment works which were built 

between 2000-2003. In October 2001, CJV (Yanjiao CWC) was established between The China 

Water Company and Sanhe Yanjiao Water Company to develop and manage water supply in Yanjiao 

ETDZ. The water treatment and supply facilities have been constructed in two phases and currently 

have a maximum output of 60Mld. 

2000 Xinmin 25 year BOOT 80,000 water provision 

The CWC Xinmin (Liaoning Province) Water infrastructure project covers one 30,000m 3 /day water 

treatment works, built in 2000-2001. The project involved the digging of 10 new deep wells (80 metres 

in depth) along the Liu River bank; construction of a 4.5km raw water transmission pipeline and 

construction of a new 30Mld water treatment plant incorporating iron and manganese removal to 

ensure that the treated water from the plant is in compliance with the National Drinking Water 

Standards (NDWS). 

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2001 Qitaihe 25 year BOOT 130,000 water provision 

On commencing the twenty five year operational contract in 2001, the joint venture, established 

between the China Water Company and Qitaihe Water Company, took over an existing 20Mld water 

treatment plant. It has since constructed and now operates a new 100Mld plant, pumping stations 

and raw water pipelines. 

The service population has increased from 100,000 to 130,000 in the past four years. Since 2006, 

Qitaihe CWC has introduced a 24-hour water supply service so that the customers are able to enjoy a 

high quality and continuous water supply service. 

2008 Zhumadian 25 year BOOT 400,000 water provision 

In June 2008 China Water acquired 51% of Zhumadian China Water Company, a joint venture in 

Zhumadian City, Henan Province (Zhumadian Bangye Water Group holding the remaining 49%). On 

23rd July 2008 Zhumadian CWC commenced operations. Zhumadian CWC currently has a water 

supply capacity of 120Mld, supplying a transmission and distribution network of 422km. A 100Mld 

expansion is currently being constructed and is due to be operational by the end of 2009. This 

increased capacity is designed to supply seven major industrial customers engaged in a variety of 

industries, including power generation, chemical and steel production. 

Chile 

1994 Santiago Perpetual 12,500 water & wastewater 

Cascal has been active in Chile since 1995 principally through two subsidiary companies AGUAS 

SANTIAGO S.A. and AGUAS CHACABUCO S.A. Aguas Santiago operates concessions in the 

centrally regulated urban areas, mainly to the east of the city. All concessions in Chile are perpetual 

and are granted under Chilean law DFL 382/89, supervised and regulated by the Superintendence of 

Sanitary Services (SISS) and financial regulator. 

Aguas Chacabuco provides services to contract regulated new population centres in rural areas to the 

north of the city, which are all potential future urban areas. In both cases, the two companies provide 

initial construction of water and wastewater infrastructure followed by the ongoing provision of 

sanitary services to the inhabitants of those areas. 

1994 Antofagasta 30 year concession 340,000 water & wastewater 

This is the first WWTW PSP project in Chile. Situated in the northern desert regions of Chile, the 

Antofagasta facility serves one of the driest parts of the world which has only 3.3mm of rainfall pa. 

The facility treats waste from a population of almost 342,000 and recycles the water, selling it on to 

industry and farms. Since the start-up of this operation in 1994, Cascal has completed a number of 

further projects in the region. These include the design, construction and operation of a sewage 

treatment plant for the Chilean Air force at the air base of Cerro Moreno. The sewage treatment plant 

re-uses its treated water to provide for the region’s only local golf complex and country club, creating 

the dramatic contrast of a fertile golf course against the barrenness of the surrounding mountains. 

2002 Noranda 22 years Industry 

This USD6million project was signed in November 2001 and provides 6Mld of treated wastewater to a 

copper smelter. It is owned by an important Canadian company located in the sector of La Negra, 

some 45km from Antofagasta. This project encompasses the installation of both a pumped and a 

gravity pipeline system that totals 40km in length and has a capacity of 10.3Mld. This gives a surplus 

of 4Mld that can be sold to other industries which are also located in the sector of La Negra. 

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2008 Santiago Perpetual 71,500 water provision 

In June 2008 Cascal acquired 100% of ServiComunal. ServiComunal is a water and wastewater 

concession that serves the town of Colina, in the province of Chacabuco approximately 22km north of 

Santiago. It is located close to some of the other Cascal operations near Santiago. ServiComunal 

serves a population of 71,500 through 19,000 connections. 

2008 Santiago Perpetual 16,500 water provision 

In June 2008 Cascal acquired 100% of ServiLampa. ServiLampa serves the town of Lampa, 

approximately 20km north-west of Santiago as well as the housing of Sol de Septiembre about 2km to 

the south-east of Lampa. It is also 20km from Cascal’s other project at Colina (ServiComunal). 

ServiLampa serves a population of 16,500 through almost 5,000 connections. 

Mexico 

1993 Puerto Vallarta 15 year O&M 250,000 sewerage 

The first sewage treatment BOOT in Mexico, with a WWTW to secondary standard that entered 

service in 1995. This plant has enabled Puerto Vallarta to develop into a major international holiday 

resort. It has a production capacity of 216Mld. In 2004, the BOOT contract was sold to SEAPAL for a 

profit of USD12.9million and Cascal’s interest continued under an O&M contract until 2008 and was 

formally sold back to SEAPAL January 2008. 

Panama 

2004 Laguna Alta 30 years, BOOT 300,000 water 

This is Panama’s first BOOT water project involving the construction of a 76Mld potable water 

treatment plant for Aguas de Panama. The contract serves people in the La Chorrera, Arraijan and 

Capira areas, west of the Panama Canal. The project was first signed in 2000, and construction 

started in 2003 with a syndicate lead by the IFC providing USD15million of the project’s USD25million 

funding. The facility entered service in 2004. Cascal acquired the contract in 2006. The government 

announced in 2008 that it is seeking an early termination of the contract and in August 2008 Cascal 

sought leave to the Supreme Court to protect its interests. 

South Africa 

1999 Nelspruit 30 year concession 404,000, water & sewage 

The ZAR300million Silulumanzi concession covers the Maputo Development Corridor in Mpumalanga 

Province and is the fastest growing municipality in South Africa and has the World Cup football 

tournament due to be held there in 2010. This is the first full privatisation in South Africa. Cascal has 

taken over billing and revenue collection while modernising the facilities and has focused the 

concession on improving and expanding service delivery to the townships. 

In the first 2 years of operation 91km of new water mains were laid as well as 18km of sewers. At the 

same time thousands of unregistered connections were found and many household and mains leaks 

repaired. This has substantially reduced NRW and over 6Mld have been saved to date; over 8,000 

broken meters have been replaced and a further 15,000 new meters have been installed. In 

September 2008 Cascal completed the purchase of the remaining 10% of Silulumanzi. 

1999 Dolphin Coast 30 year concession 50,000 water & sewerage 

In May 2007, Cascal acquired 73.4% of Siza Water from Bouygues for USD2.9million. Siza Water 

provides water and wastewater services to approximately 50,000 people in the Dolphin Coast region 

of South Africa. The Borough of Dolphin Coast in Ballito is one of the main tourist resorts in South 

Africa and is experiencing rapid growth of both its resident population and its tourist industry. The 

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concession is operated through Siza Water which will make USD172million of investments during the 

life of the concession. The population served varies between 30,000 (low season) and 100,000 (high 

season). Siza Water generated revenues of USD5.5million in 2006. 


Name: Cascal NV 

Address: Biwater House, Station Approach, 

Dorking, Surrey RH4 1TZ 

Tel: 01306 746080 

Fax: 01306 746031 

Web: www.cascal.co.uk 

Stephane Richer (Chief Executive Officer) 

Steve Hollinshead (Chief Financial Officer) 

Jonathan Lamb (General Counsel & Company Secretary) 

Brian Winfield (Chief Growth Officer) 

Andrew Young (Projects Director) 

267 




Biwater plc 

Biwater was founded in 1968, providing water purification hardware to swimming pools. During the 

1970s, Biwater moved into sewage treatment hardware and developed a number of export markets. 

In 1986, Biwater won a USD1billion construction contract called the Malaysian Rural Water Supply 

Scheme which was followed by a 5 year maintenance contract. In 1989 it acquired the Bournemouth 

& West Hampshire Water Companies which is now part of the Cascal NV Group. Biwater is a 

privately owned company, specialising in water treatment and sewerage engineering. Biwater also 

currently has the largest installed capacity of membranes in the United States as well as the largest 

installed capacity of membrane bio-reactors (MBR’s) in the UK. 

Biwater Plc, profit and loss account 

YE 31/03 (GBPmillion) 2004 2005 2006 2007 2008 

Turnover 185.3 191.9 203.0 250.6 325.3 

Share of joint ventures (24.2) (26.6) (28.4) (18.5) (12.6) 



Pre-tax profit 0.1 6.0 (0.7) 5.2 8.4 

Biwater, number of people served internationally 

Cascal projects 4,034,000 976,000 4,034,000 

Abu Dhabi 0 1,900,000 1,900,000 

Algeria 400,000 0 400,000 

Sudan 2,500,000 0 2,500,000 

Grand Total 6,934,000 2,876,000 8,834,000 

Major PSP contracts: 

Abu Dhabi 

2008 Abu Dhabi BOT, 22.5 years 1.9million, wastewater treatment 

The project involves the construction and 22½ year operation (until October 2033) of the 300,000m 3 

/day Wathba Sewage Treatment Plant (STP) in Abu Dhabi and the 80,000m 3 /day Saad STP in Al 

Ain. 

Algeria 

2008 Oued Sebt BOO, 25 years 400,000, desalination 

A Biwater Construction Ltd led consortium has been awarded a Build, Own, Operate contract expiring 

in April 2036 for a new seawater reverse osmosis desalination plant to be constructed at Oued Sebt 

in the region of Tipaza, Algeria. The new plant will deliver 100,000m³ per day of drinking water when 

completed. 

Sudan 

2005 Khartoum 12 year management 2.5million, water provision 

Biwater was awarded a USD108million water treatment works on the banks of the River Nile for 

Khartoum State Water Corporation. This is one of Sudan’s first private sector financed water projects. 

This contract involves the Operation and Maintenance of the Biwater turnkey constructed Omdurman 

Water Treatment plant. Funding for the facility has been provided by the Dutch Ministry of Foreign 

Affairs (USD58million) and the Industrial Development Cooperation (IDC), a South African 

development bank. 

268 




Tanzania 

City Water, a joint venture of Biwater International (UK), Gauff Ingenieure (Germany) and Superdoll 

Trailer Manufacturers Ltd. (Tanzania), began operations on 1 st August 2003, implementing a 

USD143.5million donor funded project. On 13 th May 2005, the contract was cancelled by the 

government. City Water obtained a UK High Court injunction against the contract’s termination in May 

2005, pending arbitration, but this was ignored by the Tanzanian Government. An application to the 

International Centre for the Settlement of Investment Disputes (ICSID) was made and the ICSID court 

upheld Biwater’s claim that the Government of Tanzania broke the terms of the Bilateral Investment 

Treaty between the UK and Tanzania on four separate counts. 

Some recent major construction awards 

Libya: A EUR10million contract for a municipal wastewater treatment scheme in Tripoli gained in 

August 2007 and running to 2012. The scheme which comprises a wastewater treatment plant, 

pumping stations and a 14 kilometre forcemain will be commissioned in 2010 and will cater for half 

the City’s population. 

Singapore: In May 2008, Biwater was awarded a supply contract for the largest water reuse project in 

South East Asia. At a capacity of 228,000 m³ per day this will provide 15% of Singapore’s water 

demand by 2010. Design and supply will take place from February 2009, with site testing and startup 

from May 2010. 


Name: Biwater plc 

Address: Biwater House, Station Approach, 

Dorking, Surrey RH4 1TZ 

Tel: 01306 740740 

Fax: 01306 855233 

Web: www.biwater.com 

Adrian White (Executive Chairman) 

David White (Deputy Chairman) 

Larry Magor (Director) 

Martin Duffy (Company Secretary) 

269 


PART 3(i): COMPANY ANALYSIS MAJOR PLAYERS – UNITED UTILITIES 


UNITED UTILITIES PLC 

United Utilities Plc (UU) is a company specialising in managing water, wastewater, electricity and gas 

networks. Its main UK base is in the north west of England, where it provides water supply, sewerage, 

and electricity supplies to 7million people. After the divestment of Vertex and Your Communications, 

UU was reorganised as a single business with two particular sets of activities under the Utility 

Solutions banner: 

• UU North West – (Licensed multi-utility operations) manages and maintains the water and 

wastewater assets within its statutory areas of operation. 

• Infrastructure Management manages and operates assets outside its statutory areas of 

operations and brings together its other non-regulated asset-based activities as one business. 

United Utilities International sits within this part of the organisation. Formerly called UU Contract 

Solutions, these are now called non-regulated. 

United Utilities’ GBP1billion rights issue (GBP500million in September 2003 and GBP500million in 

June 2005) is the first UK rights issue to explicitly earmark funds for water and wastewater 

infrastructure spending since the 1989 privatisation. While the rights issue will require additional 

dividend payments of GBP40million pa, this is less than the coupon additional debt would have 

commanded, while lowering the coupon for future debt issues. By avoiding underwriting, the total cost 

of the issue is GBP10million. UU is returning GBP1.5billion to its shareholders in the wake of the 

GBP1,050million sale of UU Electricity (along with GBP686million in debt). 

United Utilities, profit and loss account 


Turnover 

UU North West 1,300.7 1,384.7 1,502.9 1,314.3 1,414.2 

Non-regulated N/A N/A 654.5 742.2 916.0 

Operating Profits 

Multi Utilities 516.9 541.7 637.5 581.0 611.6 

Non-regulated N/A N/A 68.5 62.6 50.6 

Group turnover 2,060.0 2,103.7 2,086.0 1,986.7 2,362.9 


Net interest -248.1 -283.8 -284.4 -139.2 -184.9 

Pre-tax profit 349.0 367.6 445.1 502.3 478.3 

Earnings/Share (p) 54.2 30.1 24.3 40.9 47.3 

Regulated water and wastewater revenues in 2005 were GBP1,126million, rising to GBP1,221million 

in 2006 and GBP1,321million in 2007. During the 2000-05 period, GBP195million was spent on 

upgrading wastewater treatment works and GBP106million on storm water overflow systems. Capital 

spending rose from a total of GBP441million in 2005-06 to GBP570million in 2006-07, 54.5% for water 

and wastewater network maintenance and 45.5% for service and quality enhancement. UU is 

implementing a carbon emission plan that will cut emissions by 18% by 2010 through using renewable 

energy supplies for its water and wastewater operations and a further 8% through harvesting methane 

from sewage treatment processes by 2012 at a total cost of GBP37million. 

In September 1999, the Mersey Basin gained the River Prize for the best river clean up operation in 

the world. This reflects the gains made since the Mersey Basin campaign started in 1981, when 

Europe’s most polluted river was described as an ‘affront to civilised society’. 2,000km of waterways 

have been restored since then, with UU spending GBP1.6billion on capital works to divert domestic 

and industrial effluents into an integrated sewerage diversion and sewage treatment scheme between 

1989 and 2002. In 2001, the first salmon were caught in the Mersey since 1921. 

After GBP1.1billion in spending between 1990 and 2002, the problem of the region’s bathing water is 

being tackled. Compliance has moved from 18% in 1988 to 97% in 2002. In 1997, after the main 

scheme had been completed, compliance was at 50% and a GBP150million follow-up scheme 

concentrated on upgrading specific STWs and to reduce further a number of storm water discharges. 

In 1999, 11 out of 34 designated beaches failed the mandatory criteria and this fell to 1 in 2003 and all 

complied in 2006. The three failures in 2007 may be attributable to exceptional rainfall. 

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Bathing water compliance 2001 2003 2004 2005 2006 2007 

Guideline 4 4 7 7 8 10 

Mandatory 26 32 29 25 22 19 

Fail 4 1 1 2 0 3 

Sale of UU Industrial 

UU acquired Hyder Industrial Solutions (HIS) from Hyder after the latter company’s take-over in 2000. 

The company provides water and wastewater provision and treatment services through the 

development of dedicated facilities. HIS was subsequently rebranded UU Industrial. These activities 

were sold to Tradebe Group, a Spanish industrial services company in October 2007. 

Scotland 

1998 Fort William 28 year PFI BOT 14,000 sewage treatment 

1998 Inverness 28 year PFI BOT 66,000 sewage treatment 

1999 Tay 28 year PFI BOT 270,000 sewage treatment 

2001 Moray Coast 28 year PFI BOT 55,000 sewage treatment 

These contracts were awarded by the North of Scotland Water Authority to Catchment Ltd, with UU 

responsible for the operation of the sewage treatment works through Caledonian Water. The 

GBP45million Highland scheme has two facilities, at Fort William (PE of 20,000 for GBP10million) and 

Inverness (PE of 125,000 for GBP35million), which are both fully operational. The Tay scheme (33% 

held by UU) is for a single site serving Dundee and Angus and entered service in March 2002 at a 

total cost of GBP120million. The GBP76million scheme for the Moray Firth involves three sewage 

treatment works and 25km of sewerage for the Moray Firth. 

England, Wales and Scotland – Outsourcing contracts 

During 2004-05, UU Contract Solutions (UUCS) gained GBP3.3billion in utility related contracts across 

the UK and revenues of at least GBP650million pa in the medium term. No contracts were 

subsequently gained, which fits in with a pattern of these contract awards in relation to the AMP 

cycles. 

The four year operations contract with Glas Cymru for Dwr Cymru Welsh Water’s (DCWW) operations 

started in April 2001. This contract was originally worth GBP450million and was expanded to 

GBP600million, covering both water and sewerage activities. To date, variable costs have been 

reduced by 20%. This was replaced with a 15 year, GBP1.5billion contract starting from April 2005, 

with five yearly reviews. In 2002, UUCS also gained a GBP15million water meter installation and 

replacement contract. 

United Utilities water outsourcing contracts 

ear Client Contract Total value Duration 

2001 Welsh Water Operations GBP450million 4 years 

2003 Scottish Water Capex management (JV) GBP1,100million 5 years 

2004 Welsh Water Operations GBP1,500million 15 years 

2005 Southern Water Capex management (JV) GBP750million 5 years 

2006 Scottish Water Capex management (JV) GBP760million 4 years 

The Southern Water contract is worth GBP300million to UU and covers 250 water and wastewater 

projects, while UU will be involved in managing water provision across Wales and sewage treatment in 

north Wales. UU is now involved in managing contracts covering 35% of the UK water sector’s asset 

base and is involved in 60% of the 9% of the utilities market in the UK that has been outsourced to 

date. Scottish Water Solutions gained a contract starting in 2004 to manage GBP1.1billion of Scottish 

Water’s GBP1.8billion 2001-06 capital spending programme. 


United Utilities International Ltd. (UUI) is the 100% held international water contracts arm of UU. After 

a number of major contract gains by UUI (as North West Water International) in 1993 and one in 1994, 

271 




it entered into a JV with Bechtel (USA) and Edison (Italy). In 2003-04, International Water sold its 

stakes in the Bulgarian, Philippine, Polish and Estonian operations back to UU and other parties. UU 

in turn sold its activities in Ecuador to Italy’s Edison in 2005 (see company entry in the 2007 

Yearbook). 

UU remains one of the leading UK water companies for international contracts. The company has 

gained a reputation for aggressively cutting back at Capex demands while meeting compliance 

targets. The company ought to be regarded as one of the five leading global competitors in water and 

sewerage privatisation projects. UU’s current target markets are the UK, central and eastern Europe 

and Australia. 

United Utilities Plc, number of people served in the UK and internationally 


England 6,840,000 6,880,000 6,880,000 

Scotland – PFI 0 405,000 405,000 

Poland 300,000 300,000 300,000 

Estonia 405,000 405,000 405,000 

Bulgaria 1,500,000 1,200,000 1,500,000 

Kuwait 0 1,900,000 1,900,000 

Philippines 5,200,000 500,000 5,200,000 

Australia 814,000 135,000 819,000 

India 1,600,000 0 1,600,000 

Total-home market 9,828,000 10,328,000 10,328,000 

Total-international 12,119,000 6,170,000 13,705,000 

Grand total 21,923,000 16,358,000 24,028,000 

Poland 

1999 Biesko Biala 12 year concession 300,000 water and wastewater 

In November 1999, UUI and International Water entered into a strategic partnership with the 

municipality of Biesko Biala and acquired 33.2% of Aqua SA, the utility providing water and 

wastewater services to the city (200,000) and 12 municipalities in the surrounding area. The 

concession is being supported by the World Bank. 

Estonia 

2000 Tallinn 15 year concession 405,000 water and wastewater 

The total contract is worth USD700million. UU and IW bid EEK338million (USD75.6million) for a 

50.4% stake in AS Tallinna Vesi. The city of Tallinn also holds a single Golden Share. The IPO of 

Tallinna Vesi saw UU’s stake fall from 38% to 26.5%. There were 15% price increases in 2004 and 

2005. The emphasis is on developing a municipal and stormwater sewerage and effluent treatment 

system. Tallinna Vesi has 19,300 customer connections including apartment blocks where all people 

are served through a common metered connection. 68% of customers are domestic customers, 20% 

apartment associations and 12% are commercial customers. 

Wastewater plant efficiency rose from 57.1% to 78.9% between 2002 and 2006, distribution losses fell 

from 31.6% in 2002 to 19.7% in 2006 and water quality compliance (all samples) rose from 95.1% in 

2002 to 99.6% in 2006. A rate rise of 6.5% above inflation in January 2008 has been agreed, with 2% 

above RPI increases for 2009 and 2010 proposed. 

Tallinna Vesi AS, profit & loss account 

FY 31/12 (EEKmillion) 2003 2004 2005 2006 2007 

Water sales 200.9 220.7 262.7 289.3 311.9 

Wastewater sales 180.7 204.5 232.9 259.7 287.3 

Other sales 122.4 123.3 94.4 144.2 221.6 

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Total revenues 504.0 548.5 592.0 693.2 820.8 

Net Income 104.5 173.0 174.4 277.8 227.8 

For further details, please see the separate company entry for Tallinna Vesi in the 2007-08 Yearbook. 

Bulgaria 

1999 Sofia 25 year concession 1,500,000 water and wastewater 

UUI and International Water were awarded the concession in December 1999. The winning bid was 

based on fees of USD152million against USD239-273million tendered by Suez and Berlin Water and 

USD66million in Capex in the first three years, against USD59-64million by the same companies. 

USD200million will be invested in the city’s infrastructure over the life of the concession. The contract 

is worth [USD]700million over its life. UU holds 57.8% of Sofiyska Voda. Customer satisfaction has 

increased from 23% in 2000 to 70% by 2005. 

Australia 

UU serves a total of 819,000 people via 12 water treatment facilities and two industrial wastewater 

treatment projects. These have been carried out in both cases as a JV with Australia’s Transfield 

Group, with 50% of the equity held by UU Australia. UU has indicated that it is keen to acquire one or 

more of the Australian water and sewerage entities that are currently being mooted for PSP. 

2008 SE Queensland 5 years, O&M Bulk water 

LinkWater, the authority responsible for the bulk transfer of potable water in SE Queensland signed a 

AUD50million five year O&M agreement with UU Australia and Transfield in April 2008. United Utilities 

and Transfield Services will assist LinkWater to operate and maintain new water grid pipeline assets 

currently under construction, along with more than 200km of existing mains and associated works 

such as pumping stations and potable water reserves. 

2004 Fleurieu Peninsula 20 year BOT 5,000 wastewater 

A AUD32million wastewater treatment plant for Victor Harbour in South Australia, designed to handle 

an average flow of 5/day. The facility entered service in mid 2005. Victor Harbour is a tourist resort on 

the Fleurieu Peninsula, with a resident population of 5,000 and an average population of 20,000. 

2003 Coliban 10 + 5 year O&M 130,000 water & wastewater 

Campaspe Asset Management is responsible for O&M for a number of municipalities in northern and 

central Victoria. This includes 22 water and 10 wastewater treatment plants. 

1993 Melbourne 25 year BOOT 100,000 water 

This was the first BOOT project in the Australian Water industry, involving the renovation of Yan Yean 

reservoir, the oldest in Victoria, particularly during summer months when demand is high. A new direct 

filtration plant has replaced existing basic treatment facilities and now has a capacity of 155,000/day. 

It can reach a population of over 300,000 and supply 100,000 of these people at any one time. After 

AUD25million in spending, the refurbished facility entered service in 1994. 

1995 Sydney 25 year BOOT 230,000 water 

The Build, Own, Operate, and Transfer (BOOT) contract was awarded in 1992 and the facility entered 

service in 1995. It involved the construction of a new water treatment works costing AUD124million. 

The plant provides a population of 230,000 people with up to 265Ml/day of water. After 25 years, 

Sydney water can either buy the facility or renegotiate another operations contract. 

1996 Adelaide 25 year BOOT 154,000 water 

UU won the Adelaide BOOT contract for water treatment in South Australia’s Riverland region in 1996. 

The AUD115million BOOT for 10 water treatment plants serves over 150,000 people in 90 

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communities. The consortium is made up of UU (50%) and AMP (Australia, 50%). Construction was 

from 1997-99, and the facility entered into service in September 1999. 

In May 2000, UU Australia signed a GBP40million 20 year DBO contract with Queensland Nickel for a 

wastewater treatment plant designed to recover nickel from process water. In September 2000, UU 

announced that it is seeking to develop an underground lake discovered by Anaconda Nickel Ltd of 

Perth in the Western Desert. The lake is estimated to hold 2,000billionL of water. It is located in the 

Officer Basin, 400km from the mining area of Kalgoorie. The water is suitable as industrial water or 

could be treated for human consumption. 

India 

2003 Tirupur 30 year BOT 1.6million water treatment 

This is the first large scale private sector water provision project in India. It was awarded to Mahindra 

Water Utilities Limited (UU Australia and Bombay’s (Mumbai's) Mahindra and Mahindra Ltd), serving 

the capital of Tamil Nadu. This involves the construction of a 185Ml/day water treatment plant, 

pipeline, service reservoirs and a wastewater treatment plant and pumping stations at a total cost of 

USD220million. The WTP entered service in 2005 and will provide water for the textile manufacturers 

and over 1.6million residents in the Tiripur municipal area and surrounding villages. 

Philippines 

1997 Eastern Manila 25 year concession 5.2million, water & sewerage 

After the World Bank’s IFC bought a 9% stake in Manila Water for USD15million in 2004 and the 2005 

IPO (35.2% sold to the public and 2.7% to employees) United Utilities holds 11.7% of Metro Manila. 

See company entry for more details. 

Water services 1997 2007 2008 

Cost of water (Ps/m 3 ) 10.70 5.55 5.88 

Compliance with drinking water standards 91% 100% 100% 

Non-revenue water 63% 25% 24% 

Households served 325,000 892,000 986,000 

Water delivery (million L/day) 440 948 1,040 

Delivery 24 hours/day 26% 98% 99% 

Some 1.3million people in low income areas have been connected to piped water supplies since 1997 

through the company’s ‘Tubig Para Sa Barangay’ programme, which has connected 223,000 

households since 1998. The company is currently developing new contracts outside its original 

territory and aims to gain similar contracts in South & South East Asia. 

Manila Water, profit and loss account 

FY 31/12 (PHPmillion) 2003 2004 2005 2006 2007 

Water sales 3,062.3 3,357.2 4,538.4 5,250.2 6,421.1 

Environmental charges 305.9 339.9 464.9 532.1 637.3 

Sewer charges 198.6 213.6 279.8 308.1 348.7 

Total revenues 3,777.9 4,291.2 5,763.1 6,784.7 7,825.4 

Net Income 1,150.5 1,329.7 1,939.7 2,226.0 2,419.0 

Water supply in 1Q 2006 was running at a peak of PHP887million L/day and rose to 1,077million L/day 

in 1H 2008. The company has rehabilitated the Magallanes wastewater treatment plant which 

processes up to 40million L/day of wastewater. It has built 26 sewage treatment plants across the area 

and two more are to be constructed as sewerage connections rise from 12% in 2007 to 30% by 2012. 

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Kuwait 

2001 Sulaibiya 30 year BOT 1.9million sewage treatment 

Utilities Development Co, (Ionics (GE) & United Utilities) are responsible for the build-operate-transfer 

deal. The project is now run by the Utilities Development Company (Kuwait) please see company 

entry in the 2007-08 Yearbook for more details. 


Name: United Utilities Plc 

Address: Dawson House, Great Sankey, 

Warrington WA5 3LW, UK 

Tel: +44 1925 237 000 

Fax: +44 1925 237 073 

Web: www.unitedutilities.com 

Web: www.unitedutilities.com.au 

Sir Richard Evans (Chairman) 

Philip Green (Group Chief Executive) 

Tim Weller (Group Finance Director) 

Charlie Cornish (MD Utility Solutions) 

275 


PART 3(ii): COMPANY ANALYIS LOCAL/REGIONAL PLAYERS 

PART 3(ii):COMPANY ANALYSIS: 

LOCAL/REGIONAL PLAYERS 

276 


ARGENTINA 


ARGENTINA 

LATIN AGUAS / CHAMAS GROUP 

Latin Aguas was founded in 1990 and in 1991 it became the first company to gain a water concession 

in Argentina. The company is the largest privately held Latin American owned water company. 

Projects have also been carried out in Brazil, Peru, Nicaragua, Dominican Republic and Ecuador. 

Latin Aguas is owned by the Chamas family, who specialise in construction work in north east 

Argentina. Three concessions serving 1.8million people have been gained to date. In Peru, GTZ Peru 

/ Proagua carried out technical assistance projects in nine regions during 2006. 

Aguas de Corrientes 

This concession, gained in 1991 was the first water and wastewater concession awarded in 

Argentina. Aguas de Corrientes SA covers 145,500 customers in 10 cities (Saladas, Goya, Mercedes, 

Esquina, Paso de los Libres, Curuzú Cuatiá, Santo Tomé, Monte Caseros and Bella Vista) of the 

province of Corrientes. The company was the first water operator to gain the ISO9002 certification for 

customer service. Three districts Empedrado, Santa Lucía and Yapeyú were incorporated in 2006. 

This contract is now reported separately from the rest of Latin Aguas, but it remains under the control 

of the Chamas Group. 

Aguas de Salta 

The 30 year concession for water and wastewater services to Salta province was awarded to Aguas 

de Salta in 1998. Aguas de Salta is a joint venture between Latin Aguas and JCR. It covers 100 

municipalities, with 36% of the population originally having inadequate water and wastewater service 

coverage. Restrictions on water supply to 160,000 people have been removed to date along with a 

capital investment of USD32.7million. Customer numbers have been increased by 40%, through 

enlarging service coverage and improved tariff collection. Revenues have been increased by 109% 

without a rate rise, through service enhancement and improved billing, with 56% more billing and the 

collection rate increasing from 68% to 92%. In 2004, a USD44million five year investment plan was 

agreed with the regulator in return for a ARS48 (USD15.6) per annum increase in water bills for all but 

the poorest 20% of its customers. 

Aguas de La Rioja 

The contract for the Province of La Rioja (population 280,198) was awarded to Aguas de La Rioja SA 

in 1999. From 1999-2003 customer connections increased by 37% from 34,952 to 47,838. From 

1999-2003, monthly collection of bills from billing revenues rose 27% to 89% resulting in revenues 

improving by 608% without tariff increases, while operational costs were reduced by 40%. 

Aguas de Tumbes 

The Tumbes concession was awarded to Latin Aguas in October 2005. It covers 14 locations in the 

Tumbes area and has two water treatment works and 11 wastewater treatment works. 

Financial numbers are for 2003, service data is for 31/12/2007, except for Aguas de Corrientes. 2007 

revenues were in excess of USD45million. 

ARSmillion 

Aguas de Aguas de Aguas de Aguas de Total 

(2003) 

La Rioja Salta Corrientes Tumbes 

Water coverage 

Customers 56,004 250,112 145,500 37,463 489,079 

People served 235,217 1,050,470 634,233 157,387 2,077,307 

Sewerage coverage 70% 70% N/A 46% N/A 

Customers 41,477 183,094 110,076 22,950 357,957 

People served 174,200 769,000 473,329 95,400 1,511,929 

Revenues 

277 


ARGENTINA 


LATIN AGUAS / CHAMAS GROUP 


Name: Latin Aguas SA 

Address: Buenos Aries 766 (W3400BMH) 

Corrientes, Argentina 

Tel: +54 3783 430017 

Fax: +56 3783 23989 

Web: www.latinaguas.com 

Web: www.aguasdelarioja.com.ar 

www.aguasdesalta.com.ar 

Dr. Jorge Chamas (President) 

278 


AUSTRALIA 


AUSTRALIA 

UNITED GROUP LIMITED 

United Group specialises in industrial maintenance, facilities management, commercial property 

management services, manufacturing, fabrication and construction for the power supply and 

distribution, water and waste management, mining and mineral processing, oil, gas and LNG and 

telecommunications sectors. Its United KG subsidiary is involved in integrated facilities management, 

industrial maintenance and engineering construction. The company is active in Australia, New 

Zealand, the United Kingdom and Southeast Asia. 

In June 2004, United Group paid AUD15million for Thames Water Projects, a company covering 

Thames’ process engineering activities in Australia, Malaysia and Singapore. Thames Water Projects 

has a turnover of AUD50million and employs 110 staff; 60 in Melbourne, 20 in Kuala Lumpur and 30 

in Singapore. The business was part of Thames Water’s international operations and is now called 

United KG Water Projects, part of the UGL Infrastructure division. The company dates back to a water 

treatment chemicals company operating in Australia in the 1920s which was acquired by Thames 

when it bought PW Worldwide in 1989. 

While most of Thames Water Project’s activities are for third parties, the acquisition includes TW’s 

industrial water outsourcing project in Victoria. United Water anticipates winning further contracts in 

water reclamation. 

2000 Maffra 10 year BOT Water treatment 

The USD10.6million contract is for an industrial water treatment facility in the state of Victoria. 

1999 Sydney 25 year BOT Water and wastewater treatment 

The 8Ml/day water recycling facility entered service in 2000 for the Sydney Olympiad. It consists of a 

2.2Ml/day wastewater recovery plant and a 7Ml/day microfiltration and reverse osmosis water 

treatment plant. The company operates the facility for the Olympic Co-ordination authority. 

United Group aims to develop the division to concentrate on the direct management of water and 

wastewater treatment assets. The Group’s total water and wastewater order book is over 

AUD250million. In July 2008, UGL Infrastructure was awarded a five year alliance contract with 

Melbourne Water for as programme of 50 separate projects. This follows a AUD100million five year 

alliance agreement with Melbourne Water for upgrading the city’s Eastern & Western sewage 

treatment works awarded in May 2008. 

Y/E 31/06 (AUDmillion) 2004 2005 2006 2007 2008 

Turnover 1,078.5 1,258.1 2,232.4 2,549.5 3,478.2 

Operating profits 41.8 58.3 115.6 154.2 211.6 

Net income 29.1 43.0 78.7 92.7 136.1 

Earnings per share (AUD cents) 29.1 45.8 63.7 67.8 84.9 


Name: United Group Limited 

Address: 40 Miller Street, 

North Sydney, NSW 2060, Australia 

Tel: (61 2) 9492 8888 

Fax: (61 2) 9492 8844 

Web: www.unitedgroup.com.au 

Web: www.ukgwaterprojects.com.au 

Trevor Rowe (Chairman) 

Richard Leupen (Managing Director and Chief Executive Officer) 

David Irvine (Chief Financial Officer) 

279 


BRAZIL 


BRAZIL 

ANDRADE GUTIERREZ CONCESSOES 

AGC is part of Andrade Gutierrez (AG) one of Brazil's three largest construction companies active in 

construction projects and concessions throughout Latin America. AG has three divisions: 1) 

Construção Pesada 2) AG Concessões 3) AG Telecomunicações. AG holds 77.22% of AG 

Concessões (AGC), with the World Bank’s IFC owning 13.48% and Fundo de Investimentos em 

Ações (Fundação Sistel) with 9.29%. AGC holds 27.5% of Domino Holdings and Domino (other 

holders: Proactiva VE / FCC 30.0%, Daleth Partners 27.5% and Copel 15.0%) in turn holds 34.75% of 

Sanepar. 52.5% of Sanepar is held by the government of Parana, with the rest being in the market. 

FY 31/12 (BRLmillion) 2003 2004 2005 2006 2007 

Sanepar – Revenue 960 1,032 1,118 1,154 1,218 

Sanepar – EBITDA 487 497 519 486 541 

Sanepar – Investments 251 297 361 500 338 

AG Concessões – Revenues 286 364 462 1,096 1,829 

AG Concessões – EBITDA 130 165 183 270 420 

AG Concessões – Net profit 45 81 93 112 232 

Group revenues 3,850 4,371 4,729 6,277 7,891 

Group EBITDA 902 1,259 1,336 1,398 1,863 

Net profit 342 58 147 174 427 

In 1998, Domino Holdings was awarded the concession for Sanepar, the water and sewerage 

company serving the state of Parana. This is Brazil’s fourth largest water utility. Parana borders 

Argentina and is seen as a growth region in Brazil. Sanepar provides waterworks services to a total of 

8.1million inhabitants. 

BRL221million (USD04million) has been spent expanding services in the north of the State between 

2003 and 2005, including BRL123million on sewerage services in Londrina. Where 71% of 

wastewater is treated, along with BRL711million budgeted for water services extension in 2006. 

During 2005, Sanepar renewed nine municipal contracts and gained one additional 30-year 

concession for water supply and sanitation services in the municipality of Bom Jesus do Sul, with 

operations in 344 of the state’s 399 cities. In its operating area, 99% of households have access to 

treated water and 51.1% are connected to the sewerage network, with 95.7% of sewage collected, 

the highest level in Brazil. 

Sanepar, FY 31/12 2003 2004 2005 2006 2007 

Water – people served (million) 7.913 7.989 8.136 8.313 8.543 

Water connections (‘000) 2,067 2,131 2,188 2,256 2,325 

Water billed (m 3 ) 419,053 425,496 438,141 447,163 460,269 

Sewerage – people served (million) 3.585 3.664 3.892 4.106 4.438 

Sewerage connections (‘000) 824 857 926 1,004 1,098 

Sewerage billed (m 3 ) 202,140 206,344 217,331 229,694 246,448 

The acquisition of 85% of Water Port SA by AGC Participações Ltda In 2003 involves the 

development of a water and sewerage network serving the right bank of the port of Santos. 

Construction work started in 2005 and the facility entered service (with a five year operating contract) 

in late 2007, generating BRL20million pa. 


Name: Andrade Gutierrez 

Address: Av. do Contorno, nº 8123, Belo Horizonte - Minas Gerais 30110-910 

Tel: (31) 3290-6699 

Web: www.agsa.com.br 

Web: www.sanepar.pr.gov.br / www.sanepar.com.br 

Edwardo Borges do Andrade (Chairman) 

Ricardo Coutinho de Sena (President & Chief Executive, AG Concessões) 

280 


BRAZIL 


COMPANHIA DE SANEAMENTO DE MINAS GERAIS (COPASA) 

Companhia de Saneamento de Minas Gerais (COPASA) operates in the State of Minas Gerais, 

Brazil and is the third largest water and sewerage company in Brazil in terms of its net revenue. In 

2005 the State of Minas Gerais had a total population of 19.2million (with an urban population of 

approximately 16.1million). COPASA provides water supply services to 611 municipalities and 248 

towns and villages (813 locations in all), serving 12.2million people via 3.23million connections, 

along with 1.56million sewage connections serving 6.4million people. The number of people being 

served by water and sewerage contracts is growing at 3% and 6% per annum respectively. In 

February 2006, COPASA floated 30% of its shares on the Sao Paulo Stock Exchange (Bovespa). 

Evolution of activities 

2002 2004 2005 2006 2007 

Water connections (million) 2.718 2.855 2.927 3.035 3.173 

Sewerage connections (million) 1.132 1.285 1.330 1.370 1.494 

Water (million m 3 ) 613.9 608.4 617.6 575.7 589.7 

Sewage (million m 3 ) 290.5 305.6 318.9 303.9 317.7 

People served with water (million) 10.4 10.8 11.2 11.5 12.0 

People served with sewerage (million) 4.8 5.4 5.5 5.8 6.2 

People in served urban areas (million) 10.6 11.2 11.4 N/A N/A 

Concession agreements are negotiated with each municipality, with a typical term of 30 years. The 

most important contract is for the City of Belo Horizonte, a co-operation agreement being signed in 

November 2002. This contract accounted for 37.6% of COPASA's net revenue for the nine-month 

period ended September 2005. 80% of COPASA's revenue is derived from concession agreements 

that have at least 14 years to run. 

Principal contracts 

Municipality Concession Date Signed Term 

Belo Horizonte Water/Sewage 04-2004 30 years 

Contagem Water/Sewage 02-1974 99 years 

Betim Water/Sewage 12-2004 38 years 

Monte Claros Water/Sewage 04-1998 30 years 

Ipatinga Water/Sewage 12-1997 25 years 

Y/E 31/12 (BRLmillion) 2003 2004 2005 2006 2007 

Water supply 603.2 852.9 1,060.5 1,245.4 1,497.4 

Sewerage 270.4 400.9 505.6 546.5 529.9 


Operating Profits N/A 259.4 356.2 433.0 422.9 

Net Profits 94.1 253.0 288.6 356.4 329.3 

Earnings per share (BRL) N/A N/A N/A 3.11 2.87 

COPASA has 1,086 water treatment plants, with a treatment capacity that has grown from 37m 3 per 

second in 1999 to 40m 3 per second in the in 2005. A further 13 water treatment plants are under 

construction, which will see a 3.8% increase in treatment capacity. Distribution fosses have fallen 

from 26.3% in 2001 to 23.4% in 2005. 30% of sewage collected was treated at 36 wastewater 

treatment plants with a capacity of 6.2m 3 per second in 2005. A further 30 wastewater treatment 

plants with a capacity of 3.1m 3 per second are under construction. 

COPASA is continuing to expand its networks, through new concessions and internal growth. At the 

end of 2007, COPASA held water and sewage concessions in 184 municipalities, water only 

concessions in 427 municipalities and had no activities in 242 municipalities. COPASA is concentrating 

on the 2.51million people in municipalities where it provides water but not sewerage, where the 

company believes 1.575million can be addressed by the end of 2010. Water and sewerage contracts 

for a further 0.478million people have also been targeted during this period. 

281 


BRAZIL 


COMPANHIA DE SANEAMENTO DE MINAS GERAIS (COPASA) 

Capex in 2007 was BRL838million against a budgeted BRL1,000million. 

Projected Investments (BRLmillion) 

Y/E 31/12 (BRLmillion) 2008 2009 2010 

Current Concessions Water supply 177 124 105 

Sewerage 335 211 228 

Other 30 32 32 

Total 542 367 365 

New Concessions Water supply 149 149 151 

Sewerage 309 334 329 

Other 0 0 0 

Total 458 483 480 

Total 1,000 850 845 


Name: COPASA MG 

Address: Rua Mar de Espanha, 525 

Belo Horizonte - MG, 30330-270, Brazil 

Tel: +55(31)3250-2015 

Fax: +55(31)3250-1409 

Web: www.copasa.com.br 

Marcio Augusto Vasconcelos Nunes (Vice Chairman, President & CEO) 

Antonio A Junho Anastasia (Chairman) 

Ricardo Augusto Simoes Campos (Chief Financial Officer) 

282 


BRAZIL 


GRUPO EQUIPAV SA 

Equipav is a construction company that was founded in August 1960, in Campinas, in the State of 

São Paulo. The company has been involved in water construction projects since the outset, starting 

with the waste water system for the city of Flórida Paulista. The company has diversified into other 

areas including waste collection (Colepav, founded in 1993) and managing road concessions. 

In October 2005, CIBE Saneamento (Equipav and Heber Participaçoes / Bertin) acquired Agbar’s 

holding in Aguas Guariroba and 31% of Copel's holding. Copel continues to hold 10% and local 

investors 9%. CIBE’s 81% holding Aguas Guariroba was acquired for BRL80million. 

1998 Dos Lagos 25 year concession 360,000 water & sewerage 

Prolagos serves five cities in the “Região dos Lagos” (Region of the Lakes) in the state of Rio de 

Janeiro: Cabo Frio, Búzios, São Pedro da Aldeia, Iguaba Grande e Arraial do Cabo. The concession 

was originally awarded to IPE Aguas de Portugal in 1998 and AG acquired Prolagos from IPE Aguas 

de Portugal in December 2007. BRL56million was spent between 2002 and 2004 on the construction 

of four wastewater treatment works. Water coverage has increased from 30% in 1998 to 91% by 

2007, with 46% served by sewerage and sewage treatment. 

2007 Belford Roxo concession 400,000 water & sewerage 

Águas de Belford Roxo serves the city of Belford Roxo, city in the state of Rio de Janeiro. The 

concession was awarded directly to GE. The city had a population of 480,000 in 2007. 

2000 Campo Grande 30 year concession 730,000 water & sewerage 

Agbar’s Interagua was awarded a water and sewerage contract for Campo Grande in July 2000, 

which started operations in October 2000 as Aguas Guariroba, a venture 50% held by Agbar, 41% by 

Cobel and 9% by Sanesul. Total investment will be EUR155.3million. Turnover was EUR27.7million in 

1999. The concession currently serves 730,479 people for water and 123,536 for sewerage (17% of 

the population). Water meters were installed for 20,000 customers in 2001. Sewerage coverage will 

increase from 30% to 70% in the next five years. 


Name: Grupo Equipav 

Address: 

R. Selma Parada, 201, Bl-2 Térreo, 

Galleria Office Park, CEP 13091-605 

Vila Madalena, Campinas/SP, Brazil 

Tel: +55 (19) 3707-4800 

Web: www.grupoequipav.com.br 

283 


BRAZIL 


SABESP 

In 1877, the Province of Sao Paulo granted a concession for the provision of water and sewage 

services to Companhia Cantareira de Agua e Esgotos. In 1893, the Province assumed responsibility 

for the provision of water and sewage services and formed the Reparticao de Agua e Esgotos (Office 

of Water and Sewers), a Governmental agency. Companhia de Saneamento Basico do Estado de 

Sao Paulo (SABESP) was founded in 1973. The state water and sewerage company for Sao Paulo 

was partly floated on the Soma in November 1996 and promoted to the Bovespa exchange in June 

1997. The Sao Paulo Government sold a further 19% of SABESP’s equity for BRL507million 

(USD204million) in May 2002 and after further sales in 2003 and 2004 now holds 50.3% of SABESP’s 

equity. The sale took place both on the Sao Paulo Bourse and the NYSE. 

SABESP – Breakdown of 2007 revenues and volumes 


Volume 


Revenues 

Sewage 

Volume 

Sewage 

Revenues 

Residential 72% 56% 82% 60% 

Commercial 8% 21% 11% 24% 

Industrial 2% 6% 2% 7% 

Public 3% 9% 3% 10% 

Wholesale 15% 8% 2%

BRAZIL 


SABESP – Capex plans 

Y/E 31/12 (BRLmillion) 2007 2008 2009 2010 2007-10 

Water 336 563 622 755 1,976 

Sewage 487 907 824 814 3,025 

Others 137 104 145 176 662 

Total 960 1,574 1,591 1,745 5,663 

SABESP aims to increase sewerage coverage to 84% by 2010, along with adding 652,100 new water 

connections in response to the region’s population growth. There are 15.9million people in the state 

where SABESP either has no services or supplies water on a wholesale basis only. 

National and International possibilities 

Law No. 12,292 which was passed in March 2006, allows SABESP to expand its activities into other 

states in Brazil and internationally. From 2008, SABESP has been allowed to acquire stakes in these 

companies. SABESP Environmental Solutions has been established to concentrate on large users. 

SABESP - profit and loss account 

Y/E 31/12 (BRLmillion) 2003 2004 2005 2006 2007 

Turnover 4,110 4,642 5,356 5,527 5,971 


Net income 833 513 866 873 1,049 

Earnings per share 2.93 2.52 3.79 3.83 4.60 

(BRL) 

Contact Details: 

Name: Companhia de Saneamento Basico do Estado de Sao Paulo 

Address: Rua Costa Carvalho, 300, Pinheiros, 

Sao Paulo SP 05488-900, Brazil 

Tel: +55 11 3388 8000 

Fax: +55 11 3813 0254 

Web: www.sabesp.com.br 

Dilma Seli Pena (Chairman) 

Rui De Britto Alvares Affonso (CFO) 

Gesner Jose de Oliveira Filho (President / CEO) 

285 


CANADA 


CANADA 

AQUATECH WATER MANAGEMENT SERVICES INC 

Aquatech Water Management Services (AWMS, a separate entity from Aquatech International Corp 

of Pennsylvania, USA) was founded as SAUR’s Canadian subsidiary in 1981. SAUR sold the 

company to its management and private investors in 2002. 

In 2000, Aquatech had water and wastewater revenues of CAD7million. The company served 

768,000 people for wastewater and 88,500 for water provision. Some 65% of the private water sector 

in Canada is controlled by the company. At the time, Aquatech operated 25 wastewater treatment 

works, with a capacity of 680,000m 3 per day, or a PE of 2,266,666, along with 13 drinking water 

plants with a total capacity of 74,200m 3 per day. 

The company has two principal operating subsidiaries: 

• Aquacers (jointly operated with Simo Management and Gest Eau of Canada) has operated the 

sewerage and wastewater treatment services for Longueuil since 1993. 

• Gestion Eaux-Richlieu (jointly operated with P. Bailargeon Ltd of Canada) has operated the 

sewerage and wastewater treatment services of Saint-Jean-Sur-Richelieu since 1998. 

Contracts gained and retained since 2002 include: 

Régie d'Assainissement de Boischatel (sewerage pumping and wastewater treatment) 

City of Lévis (sewerage pumping and wastewater treatment for the city of Saint-Nicolas) 

City of Longueuil (sewerage pumping and wastewater treatment) 

Creg Quay Corporation (sewerage pumping and wastewater treatment) 

Municipality of Compton (water, sewerage pumping and wastewater treatment) 


Name: Aquatech Water Management Services 

Address: 101, Roland-Therrien blvd, Suite 110 Longueuil, 

Québec, J4H 4B9, Canada 

Tel: +1 48 (450) 646-5270 

Fax: +1 48 (450) 646-7977 

Web: www.aquatech-inc.com 

Jean-Guy Cadorette (General Manager) 

Jean Pierre Azzopardi (President) 

Yves HF Bélanger (Director, Administration and Finance) 

286 


CAYMAN ISLANDS 



CONSOLIDATED WATER 

Consolidated Water Co., Ltd. (CWC) was incorporated as the Cayman Water Co in August 1973, to 

provide water services in areas where the supply of potable water is scarce. The company provides 

potable water from two reverse osmosis desalination plants in Grand Cayman Island to the most 

populated areas of Grand Cayman and a public water utility in parts of the Cayman Islands under a 

20 year exclusive license from the Government of the Cayman Islands awarded in 1979 and renewed 

in 1990. The Lower Valley facility has its contract renewed for seven years in 2006 and is to be 

upgraded from 0.79 mg/day to 1.06 mg/day. There were approximately 4,600 residential and 

commercial customers (hotels, condominiums etc.) served in the Cayman Islands at the end of 2007 

compared with 3,300 in 2003. In 2005, there were 44,000 residents in the islands. 

SeaTec Belize Limited was acquired in 2000. SeaTec has operated a desalination plant on Ambergris 

Caye in Belize, since 1996. This company has been renamed Belize Water Ltd. (BW). BW serves 

some 4,500 people in Belize. In 2005, the Government of Belize acquired the facility, which CWC 

continues to operate. In addition, CWC has developed two desalination plants in the Bahamas that 

are providing water to leisure developments on those islands. The company is concentrating on 

projects on the two Bimini Islands, serving 1,600 people. 

In February 2003, the CWC acquired a series of operations in the British Virgin Islands, Barbados the 

Bahamas and the Cayman Islands. The USD25million package involves managing water treatment 

plants capable of desalinating 8million gallons of water per day. This also involved increasing the 

company’s stake in the Waterfields Co Ltd desalination plant in Nassau, Bahamas from 26.2% to 

38.9%. In 2003, the capacity of the British Virgin Island facility was expanded from 1.2 to 1.7million 

gallons per day. 

CWC Operations (million gallons per day) 

Location Plants Capacity 

Cayman Islands 6 7.60 

Bahamas 3 10.00 

Belize 1 0.51 

British Virgin Islands 1 1.70 

Total 12 19.80 

Further bids to develop and operate facilities in Bermuda and Barbados are currently under appraisal. 

In the Cayman Islands, the West Bay plant was expanded from 720,000 g/day to 920,000 g/day in 

January 2008. The major development in 2006-07 has been the development of activities in the 

Bahamas, where 9.8million g/day is now produced via two new plants. 

287 




CONSOLIDATED WATER 

CWC principal facilities (gallons per day) 

Location Plant Operation Capacity 

Cayman Islands Governor’s Harbour Retail 2,200,000 

Cayman Islands West Bay Retail 920,000 

Cayman Islands Britannia Retail 710,000 

Cayman Islands Red Gate Road Bulk 1,300,000 

Cayman Islands Lower Valley Bulk 1,100,000 

Cayman Islands North Sound Bulk 1,600,000 

Cayman Islands [1] Frank Sound Bulk 2,380,000 

Bahamas South Bimini Retail 115,000 

Bahamas [1] Windsor Bulk 2,600,000 

Bahamas [1] Blue Hills Bulk 7,200,000 

Belize Ambergris Caye Bulk 465,000 

Barbados [1] Sandy Lane Resort Bulk 1,300,000 

British Virgin Islands Jost Van Dyke Bulk 1,700,000 

British Virgin Islands [1] Tortola Bulk 700,000 

Bermuda [1] Tynes Bay Bulk 600,000 

[1] In development as of 31/12/2007 

Retail Water covers the desalination and water distribution operations in the Cayman Islands and 

Bahamas, Bulk Water covers those operations in Belize, the Cayman Islands, Bahamas and British 

Virgin Islands and Services, the company’s engineering and management services. 

Consolidated Water Co. Ltd., profit and loss account 

Y/E 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Retail water sales 10.92 12.09 13.37 18.00 19.52 

Bulk water sales 7.05 10.30 11.72 18.30 22.10 

Services revenues 1.09 0.89 1.09 1.92 7.53 

Turnover 19.05 23.28 26.19 32.23 49.15 


Net profits 4.18 6.20 5.51 7.52 11.39 

Earnings per Share (USD) 0.41 0.53 0.45 0.59 0.79 

Operations in Grand Cayman were affected during 2005 by Hurricane Ivan, which struck in 

September 2004. 


Name: Consolidated Water Co. 

Address: Trafalgar Place, West Bay Road, 

Grand Cayman, Cayman Islands 

Tel: (345) 945-4277 

Fax: (345) 949-2957 

Web: www.cwco.com 

Jeffrey M Parker (Chairman) 

Frederick W McTaggart (President and CEO) 

David Sasnett (CFO) 

288 


CHILE 


CHILE 

AGUAS ANDINAS 

Aguas Andinas (AA), formerly EMOS, is Santiago’s water supply and sewerage company. AA serves 

5million people via 1.5million customer connections. Water services to Santiago were formally 

organised in 1861 with the first capital works starting in 1865. AA was founded in 1977 and turned 

into a limited company in 1989. In June 2000, Santiago had an estimated population of 6.102million. 

Aguas Andinas, Number of Connections 

1999 2001 2003 2005 2007 

Water 1,152,000 1,376,184 1,435,723 1,502,634 1,597,737 

Sewerage 1,120,600 1,346,064 1,404,739 1,474,391 1,569,392 

42.0% of the equity of AA was sold to Inversiones Aguas Metropolitana Ldta (IAM, Suez-Lyonnaise 

and Aguas de Barcelona) for USD957million and a further 9.2% for USD178million, valuing the 

company at USD2,180million. Suez sold 30.1% of IAM to Agbar in July 2004 for EUR139million. After 

a poorly received flotation in 1999, a second share sale in 2002 has resulted in 13% of the equity now 

being held by outside investors. 35.0% of the equity currently remains in government hands 

(CORFO), which in 2004-05 planned to sell to institutional investors for USD400million. 

Aguas Andinas, service development 

Revenues are expected to double in the next ten years because of service expansion. At present its 

charges are amongst the lowest fees in Latin America. Tariffs vary by company, for Aguas Andinas in 

2007 it was CLP248 per m 3 and for sewerage CLP222 per m 3 compared with CLP230 per m 3 for 

water and for sewerage CLP187 per m 3 in 2005 which from 2004 includes sewage treatment. 

Currently, 100% of the population is served with piped water and 99% by mains sewerage and 72% 

of sewage effluents are treated, compared with 3% in 2000. Service expansion in recent years has 

concentrated on adding new connections as Santiago’s population has risen. 7,800 connections were 

added in 2003 through the award of six new concessions, along with two concessions serving 135 

customers in 2004 and four serving 1,080 customers in 2005. 2,116 customers were gained through 6 

new concessions in 2007 and other applications for concessions are pending covering 14,996 

customers. Water has also been provided to 41,485 customers (248,910 people) living in rural areas 

which previously did not have a service. 

Year (km) Aguas Andinas Aguas Cordillera 

Water Sewerage Water Sewerage 

2003 10,683 8,664 1,237 1,056 

2004 10,820 8,759 1,264 1,060 

2005 10,979 8,879 1,313 1,072 

2006 11,111 8,994 1,322 1,084 

2007 11,256 9,087 1,340 1,093 

During 2003, 71% of capital spending was for sewage treatment and 11% for sewerage. Water 

distribution accounted for 8% and bulk water treatment 4% with 6% going on information technology 

and monitoring. The lower spending in 2004-05 reflects the completion of the main elements of 

sewage treatment programme, sewage treatment accounting for 21% of spending in 2005. 

CLP325billion on capital spending in 2000-2004, compares with CLP85billion in 1995-1999. 

289 


CHILE 


AGUAS ANDINAS 

Capital spending 

Year (CLP billion) Aguas Andinas Aguas Cordillera 

2002 92.33 5.45 

2003 75.51 6.44 

2004 28.31 5.06 

2005 22.18 7.74 

2006 25.88 10.97 

2007 29.75 9.34 

23% of 2007 capex was on sewerage, 23% on sewage treatment, 14% on water treatment and 30% 

on water distribution. 

Sewage treatment works 

Facility 

Completion 

Cost Capacity (m 3 /s) Treatment coverage 

date (US4Dmillion) 

El Trebal 2001 150 4.4 23.2% 

La Farfana 2003 315 8.8 71.8% 

Los Nogales 2009 210 6.6 100.0% 

The Farfana sewage treatment works handles sewage from 3.3million people, placing it amongst the 

five largest WWTWs in the world. The USD700million sewage treatment programme involves the 

construction of 13 smaller WWTWs for 610,000 people in outlying areas. The water recovered from 

these facilities will be used to irrigate 130,000 Ha of farmland. 

Aguas Andinas, profit and loss account 

Y/E 31/12 (CLP million) 2003 2004 2005 2006 2007 

Water revenues 111,015 109,112 111,955 115,386 115,886 

Sewerage revenues 66,079 83,287 97,991 105,546 106,032 

Other – regulated 9,754 8,131 9,939 10,059 8,007 

Other – non regulated 9,285 13,821 15,992 18,331 23,831 

Turnover 168,398 195,433 219,623 249,322 253,756 


Net income 69,456 71,022 83,278 90,884 97,059 

EPS (CLP) 9.75 10.21 12.41 13.55 14.47 

2003 2004 2005 2006 2007 

Water clients (‘000) 1,436 1,467 1,503 1,550 1,598 

Sewerage clients (‘000) 1,405 1,438 1,474 1,521 1,569 

Water coverage 100% 100% 100% 100% 100% 

Sewerage coverage 98% 98% 98% 98% N/A 

Sewage treatment coverage 63% 67% 69% 72% N/A 

2008 ESSAL Acquisition 650,000 water and sewerage 

Iberdrola’s Iberener acquired 51% of Empresa de Servicios Sanitarios de Los Lagos SA (ESSAL) 

from the Chilean Government for USD94million in 1999. 35% of ESSAL is now held by the 

Government and 10% by its staff. ESSAL is one of Chile’s smaller water companies and is based in 

Region X in the south of the country. ESSAL serves 166,000 customers (650,000 people, against 

500,000 in 1999) in the Region, which includes the cities of Osorno and Puerto Montt, with a 

population growth of 6% pa. USD240million in investments is called for, to increase the number of 

water connections within its operating area and to develop sewerage services and sewage treatment 

facilities, with the aim for universal sewerage and sewage treatment by 2005. Aguas Andinas 

acquired ESSAL’s holding for CLP72.5billion in March 2008. 

290 


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AGUAS ANDINAS 

2000 Santiago Aguas Cordeillera 280,000, water & sewerage 

Enersis sold Aguas Cordeillera to AA for USD193million in June 2000. The second highest bidder 

was Biwater at USD179million. In 2000 Aguas Cordeillera served 110,636 customers (280,000 

people) for water and 108,919 for sewerage in the Vitacura, Las Condes and Lo Barnechea districts 

of Santiago. By 2007, the number of customers had increased to 125,789. 

2000 Santiago Aguas Manquehue 13,000, water & sewerage 

50% of Aguas Manquehue was acquired in 2000 and the remaining 50% in 2003. The company has 

4,982 water and 4,837 sewerage customers. The company, along with Aguas Los Dominions has 

been integrated into Aguas Cordeillera. 


Name: Aguas Andinas SA 

Address: Av. Presidente Balmaceda 1398, 

Casilla No. 1537, Santiago 420, Chile 

Tel: +56 2 496 2001 

Fax: +56 2 496 2641 

Web: www.aguasandinas.cl 

Alfredo Noman Serrano (Chairman and President) 

Joaquin Villarino Herrera (Vice Chairman) 

Felipe Larrain Aspillaga (CEO) 

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CHILE 


AGUAS NUEVAS 

In June 2004, Aguas Nuevas gained ESSAT (Tarapaca region, Aguas del Altiplano), ESSAR 

(Araucania region, Aguas Araucania) and ESMAG (Magallanes region, Aguas Megallanes), the final 

three 30 year concessions for Chile’s 12 water and wastewater regions. Regions I, IX and XII were 

the smallest and most rural of the concession areas. The Solari interests bid USD172million for the 

three concessions, compared with USD160million by JP Morgan (USA) the only other final bidder. 

YE 31/12 (CLP million) 2005 2006 2007 

Connections – water 318,103 329,823 334,810 

Connections – sanitation 337,298 349,212 353,448 

Water sales (million m 3 ) 66.63 68.32 68.84 

Turnover 48.76 52.52 57.43 

Operating profit 20.41 21.09 23.36 

Net profit 14.23 15.82 16.23 

Aguas Nuevas is owned by various investors associated with the Solari Family. Their chief interests 

lie in SACI Falabella, a leading chain of department stores in Chile that has diversified into areas such 

as financial services. Aguas Nuevas is currently 9% held by Inversione Megeve (held by Reynaldo 

Solari and three of his children), 21% by Invesriones Lucca, 20% Inversiones y Rentas Liguria (Juan 

Cueno) and 11% each by Sergio Cardone Solari, Carlos Heller, Juan Carlos Cortes and Ceccilia 

Karlezi and smaller investors. Nuevas Aguas was registered on the Santoiago stock exchange in 

June 2007. 

Development of sewage treatment 

YE 31/12 2000 2004 2005 2006 2007 

Aguas de Altiplano (ESSAT) 87.9% 98.1% 97.7% 98.7% 99.1% 

Aguas Araucania (ESSAR) 4.7% 11.5% 11.0% 90.0% 99.3% 

Aguas Magallanes (ESMAG) 11.7% 91.6% 89.1% 100.0% 100.0% 

ESSAT, ESSAR and ESMAG: Company characteristics 

Company ESSAT ESSAR ESMAG 

Region 

Purchase price (USDmillion) 74.2 61.3 35.2 

Population 482,594 869,535 150,826 

Water customers (2007) 129,093 178,430 44,652 

Sewerage customers (2007) 124,536 164,402 43,611 

Sewage customers (2007) 123,624 150,659 43,062 

Water sold (m 3 per second) 2.06 3.60 0.64 

Water treatment works 2 26 4 

Sewage treatment works 3 27 3 


Name: Aguas Nuevas 

Address: Isidora Goyenechea 3600, Piso 4, 

Las Condes, Santiago de Chile 

Tel: (56-2) 583 4600 

Web: 

www.aguasnuevas.cl 

www.agausaraucania.cl 

www.aguasaltiplano.cl 

www.aguasmagallanes.cl 

Sr. Piero Solari Donaggio (President) 

Sr. Vicente Domínguez Vial (Vice Chairman) 

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CHILE 


ANTOFAGASTA PLC 

Antofagasta PLC/Antofagasta Minerals SA is a Chilean company, listed on the London Stock 

Exchange that specialises in mineral extraction (especially copper and molybdenum) and road and 

rail logistics. In November 2003, Antofagasta gained a 30 year concession to operate the water rights 

and facilities in the Antofagasta Region of Chile previously controlled by Empresa de Servicios 

Sanitarios de Antofagasta SA (ESSAN). The concession is intended to complement Antofagasta’s 

existing transport and mining activities in the region, including the water distribution business already 

operated by the Railway. 

Antofagasta Plc, profit and loss account 

YE 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Turnover 1,076.2 1,942.1 2,445.3 3,870.0 3,826.7 

Operating Profit 357.2 1,203.4 1,506.4 2,804.1 2,653.4 

Net profit 180.7 579.5 725.8 1,354.3 1,382.1 

EPS (US cents) 18.3 58.8 73.6 137.4 140.2 

The concession contract was signed and control of the assets was transferred on 29 December 2003 

by Aguas de Antofagasta SA, the company’s newly created water management subsidiary. The cost 

of the concession was CLP116.6billion (USD193.8million). Under the concession contract, certain 

assets and liabilities were transferred to Aguas de Antofagasta by way of a USD27million sale. Other 

assets (mainly water rights and infrastructure) were transferred by way of concession and will devolve 

to ESSAN at the end of the 30 year period. There were 115,000 customers in 2003. 

Aguas de Antofagasta consists of two businesses, an unregulated business supplying mines and 

other industrial users and a regulated business supplying domestic customers. Distribution losses fell 

from 29% in 2003 to 26.5% in 2007 with plans to take this down to 25% in 2009. For Antofagasta, the 

company will focus both on the future development of mining operations in the region and the 

expected increased demand in domestic consumption. Sales to domestic customers were 27.1million 

m 3 in 2005 and 29.0million m3 in 2007, with industrial sales of 5.0million m 3 and 10.9million m 3 

respectively. The latter will grow from 2008 boosted by sales of re-treated water in Calama to mines 

and industrial clients. 

Aguas de Antofagasta, profit and loss account 

YE 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Customers 115,000 121,000 127,768 125,790 134,993 

Water sales (million m 3 ) - 32.6 33.1 37.8 39.9 

Turnover 41.4 44.9 53.7 63.7 67.1 

EBITDA 25.0 30.1 33.9 41.4 40.7 

Pre-tax profit 19.8 21.8 25.1 N/A N/A 

Non-regulated services are being expanded with a 15 year supply contract for mining water to BHP’s 

Spence project near El Tesoro running from July 2006 (2.3million m 3 in 2006 and from 2007, 

4.7million m 3 per annum). 


Name: Antofagasta PLC 

Address: 5 Princes Gate, London SW7 1QJ, 


Tel: + 44 20 7808 0988 

+ 562 377 5145 

Web: www.antofagasta.co.uk 

J-P Luksic (Chairman & CEO) 

P J Adeane (Non-Executive Director) 

Marco Kuti (CEO Aguas de Antofagasta) 

293 


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ESSBIO 

Southern Cross is a private equity group focussing on South America. The Southern Cross Latin 

America Private Equity Fund, LP was created in 1998 and the Southern Cross Latin America Private 

Equity Fund II LP which was closed in 2003. In February 2006 it acquired Thames Water’s interests in 

Chile for approximately USD300million. In 2007, ESSBIO and SEEEL were acquired by the Ontario 

Teachers Pension Fund which now holds 50.8% of the Series C equity and 30.0% of the Series A & B 

equity, along with its associate, Westwater Investment, which holds 20.8% of the Series A equity. 

ESSBIO, profit and loss account 

Y/E 31/12 (CLPbillion) 2006 2007 

Turnover 78.03 80.55 

Operating profits 30.66 31.96 

Net profits 18.79 20.41 

Earnings per Share (CLP) 7.10 7.70 

Between 2000 and 2007, CLP326.0billion has been invested on various projects, CLP35.1billion on 

water production, CLP65.0billion on water distribution, CLP50.5billion on sewerage and 

CLP147.5billion on sewage treatment. 

Region Connections Water Sewerage 

Sewage 

treatment 

O’Higgins 183,660 99% 81% 80% 

Bio Bio 447,290 99% 90% 90% 

Total 630,950 99% 87% 87% 

ESSBIO has 67 wastewater treatment works, 22 in the O’Higgins region and 45 in Bio Bio. 

Wastewater treatment coverage rose from 42% to 72% in 2003 as the capital works programme 

brought a series of new plants into operation. 

Million m 3 2005 2006 2007 

Wastewater treated 

O’Higgins 75.5 81.4 78.4 

Cordillera 58.3 72.2 79.3 

Costa 121.4 153.4 148.1 

Total 255.2 307.0 305.8 

ESSEL and ESSBIO have been merged as ESSBIO. ESSEL is now referred to as the O’Higgins 

region. 

2000 ESSEL Asset ownership 600,000 water & sewerage 

Inversiones Andes Sur, the TWI/EDP JV acquired Empresa de Servicios Sanitarios de El Libertador 

(ESSEL) of Chile for USD136million. The company serves 600,000 people in the city of Rancagua in 

Chile’s 6 th Region. ESSEL had a 2001 turnover of USD19million. TW acquired 25.5% of ESSEL for 

USD67.6million in March 2000, and bought out EDP's share of the company for USD70.5million in 

December 2001. 

2000 ESSBIO Asset ownership 1,500,000 water & sewerage 

TW acquired 50.96% of Empresa de Servicios Sanitarios del Bio-Bio SA (ESSBIO) for USD336million 

between September and October 2000. Located in Concepción, 350 miles south of the capital, 

Santiago, ESSBIO serves 1.5million people in Chile's 8 th region, and had a 2001 turnover of 

USD46.9million. Capital investment of approximately USD180million between 2002 and 2006 is 

planned, primarily targeted at wastewater treatment in Concepcion (entered service in 2003, serving 

500,000 people) and Los Angeles (140,000 people). 

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CHILE 


ESSBIO 


Name: ESSBIO 

Address: Casa Matriz, Diagonal Pedro Aguirre Cerda N° 1.129, Piso 2, Concepción, Chile 

Tel: +56 (41) 263700 

Web: www.essbio.cl 

Kevin David Kerr (President) 

Stephen Donald Dowd (Vice President) 

Pedro Pablo Errazuriz Dominguez (General Manager) 

295 


CHILE 


ESVAL 

ESVAL was the first Chilean water company to be privatised when AWG and Chile’s Enersis acquired 

45% of the company in 1998. In July 2001 AWG bought out Enersis’s 72% stake in the Aguas Puerto 

joint venture for USD131million, bringing its total investment in ESVAL’s equity to GBP142million. In 

October 2003, AWG’s 44.7% stake in Esval was acquired by Consorcio Financiero for USD82million. 

In May 2004, Aguas Puerto transferred its final 5.04% stake in Esval to investment fund administrator 

Moneda Asset Management. A residue of ESVAL is traded on the Santiago Stock Exchange. The 

company serves the city of Valparaiso and the adjacent coastal region. In November 2003, Esval’s 

Aguas del Valle gained a 30 year concession to operate Essco through a USD89.7million bid and 

Essco is wholly owned by Esval. In December 2007 the Ontario Teacher’s Pension Fund acquired 

69.4% of Esval from the holders, with Corporacion de Formento de la Produccion holding 29.4% and 

small investors holding the remaining shares. 

ESSCO ESVAL Total 

Region IV V 

People served 510,126 1,392,165 1,902,291 

Coverage – water 100% 100% 99% 

Coverage – Sewerage 96% 96% 93% 

Coverage – Sewage treatment 98% 96% 97% 

ESVAL, consolidated profit and loss account 

31/12 (CLPmillion) 2006 2007 

Revenues 92.00 94.99 

Operating profit 40.17 38.73 

Net profit 23.40 22.46 

Essco generated revenues of CLP21.9billion in 2007 and net profits of CLP6.0billion. Esval generated 

revenues of CLP71.0billion and a net of CLP17.4billion. Capital spending in 2006 and 2007 reflects 

the development of sewage treatment and sewerage services, especially at Essco. 

ESSCO ESVAL 

2006 2007 2006 2007 

Water 9% 31% 73% 73% 

Sewerage 28% 45% 10% 10% 

Sewage treatment 58% 13% 9% 9% 

Capital spending at Aguas de Valle was CLP19.49billion in 2006, 58% on wastewater treatment, 28% 

on sewerage and 9% on water treatment and distribution. In 2007, total investments were 

USD24.86million, 73% on water distribution and treatment, 10% on sewerage and 6% on sewage 

treatment. 


Name: Esval 

Address: Cochrane N° 751, Valparaíso, Chile 

Tel: + 32 2290 000 

Fax: + 32 2290 502 

Web: 

www.esval.cl 

Web: 

www.aguasdelvalle.cl 


Jorge Lesser Garcia Huidobro (Vice President) 

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CHILE 


NUEVOSUR 

Southern Cross Group is a private equity group focussing on South America. The Southern Cross 

Latin America Private Equity Fund, LP was created in 1998 and the Southern Cross Latin America 

Private Equity Fund II LP which was closed in 2003. In February 2006 it acquired Thames Water’s 

interests in Chile for approximately USD300million. In 2007, Southern Cross sold its interests in 

Nuevosur to the Ontario Teachers Pension Fund, with now holds 90.1% of the company’s equity. 

The ANSM concession contract was purchased by Thames Water for USD171million in November 

2001. Aguas Nuevo Sur, Maule (ANSM) is located in the 7 th region, serving a population of over 

600,000 and in 2000 generated revenues of USD21.4million. ESSAM is positioned between ESSEL in 

Rancagua and ESSBIO in Concepcion. 

Nuevosur, profit and loss account 

Y/E 31/12 (CLPbillion) 2006 2007 

Turnover 21.81 25.86 

Operating profits 6.22 9.29 

Net profits 2.63 7.58 

Earnings per Share (CPL) 18.71 39.50 

Million m 3 2005 2006 2007 

Wastewater treated 54.6 117.3 147.7 

The Curico WWTW increased treatment from 6% to 24% in 2002 and eight small facilities opened 

during 2003 increased the treatment rate to 35%. Sewage treatment in the region rose from 35% to 

72% in 2004 with the Molina-Lontue wastewater treatment plant entering service. Eight more small 

WWTWs entered service during 2006. 

In 2007, there were 205,460 clients, with a 99% water coverage in the region, along with 94% 

sewerage and 90% sewage treatment. 

Between 2000 and 2007, CLP100.81billion has been spent on capital spending, CLP8.33billion on 

water production, CLP14.85billion on water distribution, CLP4.27billion on sewerage and 

CLP64.09billion on sewage treatment. 

Name: AGUAS NUEVO SUR, MAULE, S.A. 

Address: Casa Matriz, Planta de Agua Potable San Luis, Sector Monte Baeza s/n Talca, Chile 

Tel: (56-71) 204101 

Web: www.aguasnuevosur.cl 


José Luis Arrano (General Manager) 

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CHINA 


CHINA 

ANHUI WATER RESOURCES DEVELOPMENT CO 

YE 31/12 (CNYmillion) 2003 2004 2005 2006 2007 

Water Turnover N/A N/A 707.2 731.9 1,003.2 

Group Turnover 807.0 947.3 1,255.9 1,511.4 1,578.6 


Net profits 25.0 30.2 30.8 42.4 24.0 

Earnings Per Share (CNY) 0.21 0.13 0.14 0.19 0.11 

Anhui Water Resources Development Co., Ltd was listed on the Shanghai Stock Exchange in April 

2003. The company is involved in six business lines: Construction, Water, Real Estate, Development 

of Building Materials, Construction & Operation of Five Star Hotels and Technology consultancy. 

Water accounted for 43% of 2007 revenues and real estate 22%. 

Water activities include operating water and sewerage services and water and wastewater engineering 

work. 


Name: Anhui Water Resources Development Co Ltd 

Address: Zhanggongshan Nance, 

Donghai Road, Bengbu, Anhui 233000 

Tel: 086 552 408 1028 

Web: www.cahsl.com 

Wang Jimgmin (Chairman) 

Yang Guangliang (President) 

Niu Xiaofeng (Chief Financial Officer) 

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CHINA 


BEIJING CAPITAL CO 

The Beijing Capital Group was founded in 1995 through the amalgamation of 17 state owned 

enterprises in Beijing. In 1999, the company entered the water sector when it acquired the Gao Bei 

Dian Water Treatment Plant from the Beijing Municipal Water Treatment Company. Since 1989, the 

Group has invested over CNY6billion in urban infrastructure development and has average returns of 

9-12% on its water activities. BCC was partly floated on the Shanghai Stock Exchange in 2000. Its' 

72.6% held subsidiary Beijing Capital Co. (BCC) was listed on the Shanghai Stock Exchange in 2000. 

BCC has invested in a series of water joint ventures and has started to operate its own water 

contracts, generating revenues of CNY14.8million in 2003. In 2004, Capital Group's income from water 

services was up 398% over the previous year; this was 23% of the primary business' income and an 

increase of 17% from the previous year. 

Water revenues accounted for 73% of BCC’s revenues in 2007. BCC’s water treatment capacity in 

2005 was 6million m 3 per day, supplying 10million people in total. The capacity rose to 7.4million m 3 

per day, serving 14million people in 2006 and by the end of 2007, total capacity was 8.3million m 3 per 

day. BCC aims to have a total treatment capacity of 15million m 3 per day by 2010. 

Beijing Capital Co 

YE 31/12 (CNYmillion) 2003 2004 2005 2006 2007 

Turnover – Water N/A N/A 202.0 429.9 444.3 

Turnover – Sewerage N/A N/A 18.4 397.0 573.4 

Turnover 234.2 299.1 482.4 1,190.0 1,400.6 


Net profits 403.5 490.5 485.4 451.9 510.3 

Earnings Per Share (CNY) 0.19 0.23 0.22 0.21 0.23 

Three joint ventures have been signed to date: 

Beijing Water Co., Ltd. A joint venture established in 2002 by Beijing Urban Drainage Group (51%) 

and Beijing Capital Co., Ltd (49%). Beijing Water Co., Ltd is focused on city sewage treatment. Its 

registered capital is CNY4.02billion, ranking first in China. Its two subsidiary factories, Gaobeidian 

Sewage Treatment Factory and Jiuxianqiao Sewage Treatment Factory, have a total capacity of 

2.1million m 3 per day, accounting for 81% of sewage handling capacity in Beijing. 1.2million m 3 per 

day of capacity was operational in 2006 with 0.9million m 3 per day (serving 2.88million people) under 

construction. 

Ma'anshan Capital Water Co., Ltd. Established by Beijing Capital Co. Ltd, in 2002, with a 30 year 

concession, BCC has invested CNY90million and holds 60% of the equity. The total capacity of the 

joint venture is 0.455million m 3 per day, supplying 550,000 people. The company is developing water 

treatment works in eastern China: Shandong, Jiangsu, Zhejiang and Anhui. 

Beijing Capital VW Investment Co., Ltd. This company was founded in 2003 following a strategic 

agreement signed in 2001 and has a registered capital of USD30million; Beijing Capital Co., Ltd (51%) 

and Veolia Water Investment (49%). This was the first Sino-Foreign investment company in this 

sector. Three contracts have been gained to date, in Shenzhen, Baoji and Weinan. 

In December 2003, the JV announced that it was paying CNY2.94billion for a 40% stake in the 

Shenzhen Water Group (SWG). Shenzhen Water Holdings Co., Ltd (SWH) was formed out of the merger 

of the former SWG with the former Shenzhen Sewage Administration on 28, December 2001. This water 

wastewater service company operates 5 water treatment plants, 4 wastewater treatment plants, 4 

sewerage systems and 15 fully owned or holding companies. BCC has 55% of the contract’s equity, 

Veolia Environnement 40% and CGE-BC Water Investments 5%. As a water supply and sewage 

company SWH’s total asset amounts to CNY6.6billion and net assets to CNY5.9billion, of which about 

CNY2billion is from the former SWG and about CNY4billion from sewage assets. SWH has the water 

concession of the Shenzhen Special Economic Zone, covering 93% of the SEZ’s water supply and 

95% of its wastewater treatment. 

Shenzhen Water Holdings Co., Ltd (SWH) was formed out of the merger of the former SWG with the 

former Shenzhen Sewage Administration on 28 December 2001. This is the first water group that has 

transformed from a water company to a company with both water service and wastewater service. 

With total assets of over CNY6billion which include 5 water plants, 4 wastewater processing plants, 

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CHINA 



5 branches, 4 sewage systems and 15 fully owned or holding companies, the state-owned SWH treats 

1.672million m 3 per day, 93% of Shenzhen City's drinking water, along with a sewage treatment capacity 

of 1.082million m per day, accounting for 95% of the City's total. It supplies 500million m 3 of water and 

treats 300million m 3 of wastewater and its annual turnover is over CNY1billion. 

2003 Baoji 25 year BOT 550,000, water provision 

The Baoji VW-BC Operation Co., Ltd is 44% held by BCC, along with Veolia Environnement and the 

Baoji Tap Water Company. The facility has a design capacity of 175,000m 3 per day, covering 550,000 

people. 

2005 Weinan 29 year BOT 260,000, water provision 

In 2005, Beijing Capital Co., Ltd, Veolia Water, and Weinan Water Supply Co., Ltd founded the 

Weinan VW-BC Operation Co., Ltd. The operation period is 25 years, with BCC holding 44% of the 

equity, VE 26% and the municipality 30%. Its design capacity is 70,000m 3 per day, covering water 

provision for 250,000 people. 

Other contract gains noted 

2006 Linyi 25 year BOT 600,000, wastewater treatment 

The Linyi Capital Water Co., Ltd. is 40% held by Beijing Capital Co., Ltd, along with 30% by Beijing 

Capital (HK) Ltd and Linyi Wastewater Treatment Plant holding 30%. The treatment capacity of the 

company is 150,000m 3 per day, including 100,000m 3 per day in the first phase and 50,000m 3 per day 

in the second phase, covering a population of 600,000. 

2004 Qingdao BOT 250,000, water provision 

Qingdao Capital Ruihai Water Co., Ltd. is 40% held by BCC, with the rest being held by Qingdao 

Municipal Drainage Management Section and Qingdao City Development & Investment Co., Ltd. This joint 

venture company provides 80,000m 3 of water each day and serves 250,000 people. 

2004 Yuyao 25 year BOT 680,000, water provision 

The Yuyao Capital Water Co., Ltd is 95% held by BCC and was formed in January 2004. It has a 25 

year contract to supply 680,000 people with drinking water, with a capacity of 220,000m 3 per day. 

2004 Xuzhou 30 year BOT 1,200,000, water provision 

The Xuzhou Capital Water Co., Ltd is 80% held by BCC and 2% by the Xuzhou Tap Water Company. 

The company supplies 550,000m 3 of water per day, covering a population of 1.2million. 

2005 Qinhuangdao 25 year BOT 720,000, water treatment 

Qinhuangdao Capital Water Co., Ltd is 51% held by BCC and 49% by the Qinhuangdao Public Utilities 

Department. It has a water supply capacity of 390,000m 3 per day, covering a population of 720,000. 

2004 Huainan 30 year BOT 550,000, water & wastewater 

Huainan Capital Water Co., Ltd. is 88% held by BCC and 12% by Huainan Water Service Co., Ltd. 

The company has a water treatment capacity of 270,000m 3 per day and a sewage treatment capacity 

of 100,000 m 3 per day, serving a population of 550,000. 

2007 Hewenhu 30 year BOT 500,000, water & wastewater 

In September 2007, BCC acquired 65% of the Jiujiang Hewenhu Environmental Protection Co., Ltd. 

from Shenzhen Jin Da Lai Environmental Protection Co., Ltd. and Jiangxi Jin Da Lai Environmental 

Protection R&D Center Co., Ltd. The company gained the Hewenhu Sewage Plant and Tail Water 

Discharge Project BOT in Hewenhu, Jiangxi in 2006. Hewenhu Sewage Plant is expected to process 

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polluted water of 100,000m 3 per day after the first-stage construction, rising to 300,000m 3 per day in 

the future. 

2007 Dongying 30 year BOT 650,000, water & wastewater 

In December 2007, Beijing Capital Co., Ltd. and Guozhong Water Investment Co., Ltd. agreed a 30 

year BOO contract serving the Shandong Dongying Economic Development Zone Sewage Treatment 

Plant with a 130,000m 3 per day capacity. BCC also reached a Strategic Cooperation Agreement with 

Hunan Provincial People's Government in Changsha for the franchise rights to construct and operate 

new sewage treatment installations in Hunan Province. 

Contact details 

Name: Beijing Capital Co 

Address: 7 th Floor, Jinguan Centre No 8, 

Sanhuan Road East, Chaoyang District, 

Beijing, 100028 China 

Tel: 86-010-6468-9035 

Fax: 86-010-6468-9030 

Web: www.capitalgroup.com.cn 

www.capitalwater.cn 

Lin Bao (Chairman) 

Liu Xiaoguang (Deputy Chairman & CEO) 

Cao Gui Jie (Deputy General Manager) 

Pan Wentang (President) 

Yu Li (Chief Financial Officer) 

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CHINA 


BIO TREAT TECHNOLOGIES 

Bio-Treat Technologies specialises in developing and implementing wastewater systems using its 

BMS Biological Process Technology. This process was developed by the company in 1993 and has 

been used in 500 waste and wastewater treatment projects in China. In 2002, Bio-Treat provided the 

technology for Global Green Tech Group's (Hong Kong, see company entry) contracts in China. The 

company was floated in January 2004 and gained its first BOT contract in China (Kunshan) in 

February 2004. Since then, the company has gained a total of 15 BOT and TOT water and wastewater 

treatment contracts serving more than 6.25million people along with 13 turnkey projects. 

2008 Xuancheng 30 year BOT 250,000, wastewater treatment 

Xuanchedng is in Anhui Province. The CNY66million plant will have a capacity of 50,000m 3 per day. It 

will enter service at the start of 2010. 

2008 Foshan 23 year BOT 250,000, wastewater treatment 

The CNY66million plant will serve Shishan Town, in the Nanhai District of Foshan City in Guangdong. It 

will have a capacity of 50,000m 3 per day. It will enter service at the start of 2010. 

2007 Binzhou 25 year BOT 200,000, wastewater treatment 

The CNY70million plant will serve Binzhou City’s Economic Development Zone in Shandong Province. 

It will have a capacity of 40,000 m 3 per day and will enter service during 2008. 

2007 Nanjing 30 year BOT 200,000, wastewater treatment 

Two wastewater treatment works with a capacity of 20,000m 3 per day will be built at a total cost of 

CNY67million. They will serve Nanjing City’s Luhe Economic Development Zone. Further development 

of treatment capacity is anticipated and these plants will enter service by the end of 2008. 

2006 Wuhan 29 year TOT Wastewater treatment 

2006 Kunshan 29 year TOT 500,000 wastewater treatment 

The CNY376million Wuhan and Kunshan contracts were awarded in July 2006. The Kunshan contract 

for the plant was developed by the company in 2004-05, while the Wuhan contract involves the 

rehabilitation of an existing municipally built facility. The Wuhan facility expected to re-enter service in 

1Q 2007. 

2005 Beijing 29 year TOT 200,000 wastewater treatment 

The CNY110million contract was awarded in July 2006. The underground facility will have a 40,000m 3 

per day capacity. Construction was to be started at the end of 2006 and to be completed within 24 

months. 

2006 Suzhou 25 year BOT 2million wastewater treatment 

The CNY500million contract was awarded in January 2006. Suzhou is in Jiangsu Province. It 

involves the construction of a 150,000m 3 per day facility which will eventually become a 450,000m 3 

per day complex. Construction took place between mid 2006 and 2008. 

2005 Nanjing 25 year BOT 200,000 wastewater treatment 

This USD10million 40,000m 3 per day project in Jiangsu Province was planned to be constructed 

during 2006-07. The operational phase started by the end of 2007. A similar plant may in future be 

built next to this one. 

2005 Jiangdu 230 year BOT 250,000 water treatment 

In April 2005, Bio-Treat gained a CNY179million 100,000m 3 per day water treatment BOT contract for 

the city in Jiangsu Province. The contract will be operated by New Efficient Limited, which is 34% held 

by Bio-Treat and 65% held by World Eagle. The plant was expected to enter service in mid 2007. 

302 


CHINA 


BIO TREAT TECHNOLOGIES 

2004 Xianjiang 25 year BOT 1million wastewater treatment 

The Xianjiang (Shaanxi Province) contract incurred a CNY36million cost over-run in 2006. The 

contract's construction phase was originally meant to run from October 2004 to December 2006 at a 

cost of CNY288million. It entered service in May 2006 and has a capacity of 200,000m 3 per day. 

2005 Lianyuangang 25 year TOT 500,000 wastewater treatment 

Bio-Treat's Perfect Grace Investments Limited owns 95% of the CNY140million project in a joint 

venture with Oriental Fortune, covering the rehabilitation and upgrading of the city's 100,000m 3 per 

day wastewater treatment plant. Lianyuangang is in Jiangsu Province. 

2005 Lianyuangang 25 year BOT 400,000 wastewater treatment 

Bio-Treat's Perfect Grace Investments Limited owns 95% of a CNY105million project in a joint venture 

with Oriental Fortune, covering the construction of a new 80,000m 3 per day wastewater treatment 

plant. Lianyuangang is in Jiangsu Province. 

2005 Suqian 30 year BOT 300,000 wastewater treatment 

This covers two contracts gained in March 2005 worth a total of CNY178million for the construction of 

two plants with a capacity of 80,000m 3 per day and 60,000m 3 per day. Construction started in May 

2005 and was completed in September 2006. Suqian is in Jiangsu Province. 

2004 Kunshan 29 year TOT 500,000 wastewater treatment 

The contract for the Kunshan plant was awarded in February 2004 and construction was completed in 

July 2005 and has a treatment capacity of 100,000m 3 per day. 

Y/E 31/06 (CNYmillion) 2004 2005 2006 2007 2008 

Wastewater treatment services 537.7 1,023.9 1,287.2 1,356.7 1,098.0 

Sales of goods 129.6 230.0 259.9 122.6 183.9 

BOT / TOT discharge fee N/A N/A 12.6 109.4 122.4 

Group turnover 667.3 1,254.0 1,559.7 1,588.7 1,405.3 


Net profits 280.9 327.6 189.0 330.3 125.4 

Earnings per share (CNYcents) 0.31 0.39 0.22 0.37 0.14 


Name: Bio-Treat Technology Limited 

Address: Tu Tang Industry Area 

Tu Tang, Changping, 

Dongguan City, Guangdong, China 

Tel; +86 769 399 2606 

Fax: +86 769 382 5638 

Web: www.bio-treattechnology.com 

Chan Kong (Chairman & CEO) 

Lau Cheuk Lun (CFO) 

303 


CHINA 


CATHAY INTERNATIONAL GROUP 

Cathay International Holdings (CIH) is a Hong Kong and UK based company founded in 1991. It 

specialises in hotels, toll roads, power plants and through its minority held subsidiary Cathay 

International Water (CIW) it has diversified into a number of water treatment plant operation contracts. 

In 1996, STIC (now part of Sembcorp of Singapore) acquired an 18% stake in Cathay International’s 

water activities for USD45million. This stake was sold back to CIW and Cathay International 

(Overseas) Holdings for USD44.8million in June 2003. Cathay International Water's shareholders 

include the Santander Group (since 1991), Nomura/Jafco (since April 1996), UBS (Switzerland, since 

May 1997) and JP Morgan Securities Asia (since May 1998). 

Following a series of contract awards in 1997, seven facilities with a total capacity of 1.89million m 3 

per day were rehabilitated or built for USD196.5million. 

Jinan 

1997 Dayang 25 year Water treatment 

Dayang has a capacity of 0.4million m 3 per day and is being constructed for USD30million. CIW holds 

60% of the joint venture. 

1997 Three facilities 25 year BOT Water treatment 

Three facilities (Dongjiao, Nanjiao and Xijiao) with a combined capacity of 0.9million m 3 per day are 

being rehabilitated for USD90million. CIW holds 80% of the joint venture. 

Binzhou 

1997 Dongaio 20 year ROT Water treatment 

Dongiao has a capacity of 40,000m 3 per day and is being rehabilitated for USD9.9million. CIW holds 

60% of the joint venture. 

1997 Cathay Water Plant 20 year ROT Water treatment 

The Binzhou Cathay Water Plant Limited has a capacity of 50,000m 3 

rehabilitated for USD6.6million. CIW holds 60% of the joint venture. 

per day and is being 

Jiangmen 

1997 Jiangmen ROT Water treatment 

The water plant has a capacity of 0.5million m 3 per day and is being rehabilitated for USD60million. 

CIW holds 80% of the joint venture. 

YE 31/12 (USDmillion) 2004 2005 2006 2007 

Turnover 6.9 6.3 17.7 34.2 

Operating profits -5.0 -4.1 -2.4 -3.0 

Net profits -6.8 -6.4 -5.3 -8.0 

Earnings Per Share (USD) -0.04 -0.03 -0.02 -0.03 


Name: Cathay International Holdings Limited 

Address: 25/F Chartered Bank Building 

4-4A Des Voeux Road, Central 

Hong Kong 

Tel: +852 2828 9289 

James Buchanan (Chairman) 

Wu Zhen Tao (CEO) 

Patrick Sung (FD) 

304 


CHINA 


CHEUNG KONG INFRASTRUCTURE HOLDINGS LTD 

Cheung Kong Infrastructure (CKI) is 85% held by Hutchinson Whampooa Limited and was partly 

floated on the Hong Kong Stock Exchange in 1996. CKI invested HKD69million in the HKD140million 

Yueyang water treatment works project serving Yueyang City (Hunan Province) in 1998. This stake 

was sold for a HKD11million profit in 2003. In addition, CKI’s CK Life Sciences has developed a series 

of bioremediation product applications; WonderTreat, for treatment of municipal wastewater, 

contaminated surface water and industrial wastewater. CKI acquired AquaTower of Australia in March 

2004. In April 2004, CKI acquired Cambridge Water Plc of the UK from Spain’s Union Fenosa for 

GBP51.4million. Union Fenosa had in turn acquired Cambridge Water for GBP57million in 1999. CKI 

also holds 4.75% of Southern Water Plc. 

Cheung Kong Infrastructure, profit and loss account 

YE 31/12 (HKDmillion) 2003 2004 2005 2006 2007 

Turnover 1,613 2,507 2,247 1,822 1,865 

Operating profits 1,043 957 835 392 412 

Other profits 3,579 3,210 5,637 3,637 4,779 

Net profits 3,349 3,523 6,007 3,670 4,772 

Earnings Per Share (HKD) 1.49 1.56 2.66 1.63 2.12 

Australia: AquaTower 

AquaTower was formed in 2002 to provide potable water to 25,000 people in four regional towns in 

Victoria. CKI was one of the two original investors in the 25 year BOT project and in 2004 acquired the 

outstanding 50% held by Abigroup of Australia, CKI holding 49% and CK Life Sciences holding 51%. 

United Kingdom: Cambridge Water 

The Cambridge University and Town Waterworks was founded in 1853 and was floated as Cambridge 

Water Plc in 1996. Cambridge Water supplies water to 297,000 people (119,700 customers) in the city 

of Cambridge and certain surrounding districts, with sewerage services being provided by Anglian 

Water Plc. The population in the service area has increased by 17,000 since 1995. The water and gas 

and electricity activities were spun off into separate companies and the latter activities were sold to 

Scottish and Southern Electricity in 2003 for GBP4million. 60% of customers have water meters, 

compared with 51% in 2002 and demand for metering is rising by 4% pa. 

Cambridge Water, profit and loss account 


Turnover 15.76 15.68 17.51 18.64 20.69 


Pre-tax profit 10.76 4.58 3.74 4.83 3.59 


Name: Cambridge Water Plc 

Address: 41 Rustat Road, Cambridge CB1 3QS, United Kingdom 

Tel: +44 1223 706050 

Fax: +44 1223 214052 

Web: www.cambridge-water.co.uk 

Michael Halstead (Chairman) 

Stephen Kay (Managing Director) 


Name: Cheung Kong Infrastructure 

Address: Cheung Kong Centre, 2 Queen’s Road, Central, Hong Kong 

Tel: 852 2122 3986 

Fax: 852 2501 4550 

Web: www.cki.com.hk 

Victor Li Tzar Kuoi (Chairman) 

Kam Hing Lam (MD) 

Chan Loi Shun (CFO) 

305 


CHINA 


CHINA EVERBRIGHT INTERNATIONAL 

China Everbright International (CEI) is a Hong Kong based company active in Guangzhou Province, 

providing water and wastewater for Shenzhen (population 1.3million) through a local joint venture and 

wastewater for Zibo (population 2.6million), along with further projects under development. 

YE 31/12 (HKDmillion) 2003 2004 2005 2006 2007 

Wastewater turnover N/A N/A N/A 298.2 550.5 

Turnover 83.6 65.2 132.9 884.0 1,347.0 

Operating profits N/A 15.3 38.7 185.9 360.5 

Other profits N/A 101.7 104.1 381.6 65.4 

Net profits N/A 86.8 106.8 460.5 337.9 

Earnings Per Share (HKDc) N/A 0.34 0.42 0.16 0.11 

The Everbright-Veolia Water joint venture was signed in 2003. In August 2004, CEI, Veolia Water and 

the Qingdao Municipal Government started a project covering the city’s Qingdao Haibohe and 

Qingdao Maidao Waste Water Treatment Plants. The total investment cost of the project is 

USD42.8million, with CEI holding 60% of the project’s equity. CEI is the lead player in the asset 

owning contract (Qingdao EB-VW Waste Water Treatment Co. Ltd.) and Veolia is the lead player in 

the operating contract (Qingdao Veolia Water Operating Company Limited). Commercial operation of 

the plants started in January 2005, with a treatment capacity of 150,000m 3 per day. During 2005, 

54.4million m 3 of sewage was treated. In March 2005, a consortium led by Veolia Water Systems was 

appointed by the operating company to extend the Qingdao Maidao Waste Water Treatment Plant, 

boosting overall treatment capacity to 220,000m 3 per day with an investment of CNY244million. This 

facility entered service in July 2007. 

2005 Zibo 25 years, TOT 450,000, wastewater treatment 

CEI gained a concession for Zibo’s wastewater treatment with the Zibo Municipal Government, Zibo 

Finance Bureau and Zibo City Environmental Protection Bureau and Zibo City Fisheries Bureau in 

September 2005. This is a 25 year contract on a TOT basis, with an investment cost of 

CNY224million. Operations started in December 2005, with the rehabilitated facilities entering service 

in May 2006, with a daily treatment capacity in excess of 220,000m 3 per day. 

In February 2005, CEI entered into a framework agreement with Shenzhen Municipal Government for 

long-term strategic cooperation for developing BOT or TOT waste-to-energy projects and urban waste 

water treatment projects in Shenzhen, along with seeking opportunities in reusable water generation. 

2008 Boxing County 30 years, TOT 300,000, wastewater treatment 

In February 2008, CEI signed a two phased wastewater treatment contract with the Boxing County 

Government, Shandong Province. This covers a 30,000 m 3 per day TOT contract (Phase I, a works 

upgrade) and Phase II, a 30,000 m 3 per day BOT contract. The project will cost CNYB70-80million. 

And will be financed by raising the waste water treatment service fee will be increased from CNY0.75 

per tonne to CNY0.9 per tonne. Boxing neighbours Zibo City and has a population of about 478,000. 

2008 Jinan 26 years, BOT 1million, wastewater treatment 

In March 2008 CEI signed a concession with the Jinan Municipal and Public Utility Bureau for a 26 

year BOT, 100,000m 3 per day Jinan Number 3 wastewater treatment works. The CNY138million 

facility will be opened by October 2009. 

2006 Jinan 30 years, TOT 2million, wastewater treatment 

The first phase of the Jinan Waste Water Treatment Upgrade Work Project, covering the waste water 

treatment plants No. 1 and 2 will be completed by the end of 2008 for approximately CNY280million. 

CEI acquired the two waste water treatment plants in Jinan City by way of TOT in 2006 and secured 

operation rights of the plants for 30 years. After the completion of the refurbishment work in 2007, their 

waste water treatment capacity is approximately 400,000m 3 per day. 

2007 Jiangyin Acquisition 1million, wastewater treatment 

306 


CHINA 


In November 2007, Everbright Water (Jiangyin) Limited a JV between CEI and Jianguin’s Xin Guo 

Lian took over four waste water treatment plants in Jiangyin City for CNY624million. CEI holds 70% of 

the joint venture. The facilities have a total capacity of 190,000m 3 per day and will cost CNY201million 

to build. 


Name: China Everbright International Limited 

Address: 27 th Floor, Far East Finance Centre, 16 Harcourt Road, Hong Kong 

Tel: (852) 2804 1886 

Fax: (852) 2528 4228 

Web: www.ebchinaintl.com 

Tang Shuanging (Chairman) 

Chen Xiaoping (CEO) 

Raymond Wong Kam Chung (CFO) 

307 


CHINA 


CHINA WATER GROUP 

Previously called the China Evergreen Environmental Group, CWG is based in Guangzhou and is held 

by Evergreen Asset Group Ltd, which is domiciled in the British Virgin Islands. The holding company 

has four majority-owned subsidiaries, Guangdong Xinxinmei Environmental Protection Co. Ltd., 

Beijing Haotai Shiyuan Water Purification Co. Ltd., Shangdong Haiyang Shenshi Environmental 

Protection Co. Ltd. and Xianyang Beicheng Water Purification Co. Ltd. 

YE 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Turnover 0.00 9.37 6.98 4.80 N/A 

Operating profits -0.08 1.95 2.41 -6.58 N/A 

Pre-tax profits -0.08 3.62 -0.48 -1.68 N/A 

Net profits 1.77 3.70 -0.76 -1.50 N/A 

Earnings Per Share (USD) 0.10 0.00 -0.01 -0.01 N/A 

To date, four BOT contracts have either been completed or are in progress. Revenues from BOT 

contracts were USD250,571 in 2004, USD302,011 in 2005 and USD989,970 in 2006. 

The Company has completed the design and construction of over 14 waste water facilities across 

China with total daily capacity of 120,000m 3 , with three BOT waste water treatment facilities with a 

total daily capacity of 70,000m 3 . The company currently has a pipeline of 10 BOT and turnkey projects 

principally in Guangdong Province through Guangdong Xinxinmei Environmental Protection Company 

and has entered into two arrangements to acquire existing BOT projects in Henan Province with a total 

processing capacity of 130,000m 3 per day. 

BOT contracts 

Cost 

(USDmillion) 

Capacity 

(m 3 per day) 

Contract 

(years) 

Operational 

since 

Tianjin Shi Shen 1.09 10,000 20 11-2003 

Xinle Shen Mei 4.11 40,000 22 10-2003 

Haiyang City Shen Shi 3.62 20,000 22 06-2005 

Handan Cheng Sheng 3.53 33,000 22 2Q-2007 

The municipal wastewater treatment facility serving Haiyang City in Shandong Province will generate 

an average revenue of USD600,000-650,000 per annum over the total project life of 22 years. 

A BOT contract in Beijing (Beijing Hao Tai) was sold to a third party in 2006, generating a net profit of 

USD 44,872. No material announcements regarding projects are available about the company’s 

activities post 2006 other than in January 2007, the company decreased its investment in the Handan 

project from HKD 17.86million to HKD 7.2million, retaining a 34.32% holding in the project. 


Name: China Water Group 

Address: 

7A01, Baicheng Building, 584 Yingbin Road, Dashi, Panyu District, 

Guangzhou, Guangdong, China 

Tel: 86 20 3479 9768 

Web: www.china-eec.com 

Pu Chong Liang (President, Chief Executive Officer) 

Li Jia He (Chief Operating Officer) 

308 


CHINA 


CHINA WATER AFFAIRS GROUP 

The China Water Affairs Group started operating water and sewage BOT contracts in 2002-03. The 

company provided 0.5million m 3 per day of water in 2006, serving 1.2million people. The CWAG now 

operates 20 operating units in China providing a total of 440,000m 3 per day of raw water and 

3.5million m 3 per day of potable water, serving approximately 6.0million people. Sewage treatment 

activities include an 80,000m 3 per day 25 year TOT contract in Huizhou, which started in July 2007. 

China Water Affairs Group, profit and loss account 

FY 31/03 (HKDmillion) 2004 2005 2006 2007 2008 

Water provision 0.6 6.7 15.0 55.8 240.3 

Water installation 0.0 0.2 9.3 41.7 128.7 

Sewage treatment projects 0.0 6.0 9.1 0.0 26.8 

Turnover 33.2 48.5 52.9 140.3 772.5 

Pre-tax profit -99.3 -29.8 -20.3 151.7 655.1 

Net profit -99.3 -31.0 -25.0 102.9 520.0 

Water provision contracts 

Company City / Province Year Stake 

Jiangxi Wannian Silver Dragon Water Affairs Wannian, Jiangxi 2005 100% 

Xinyu Water Affairs Group Xinyu, Jiangxi 2005 60% 

Yanshan Silver Dragon Water Affairs Qianshan, Jiangxi N/A 100% 

Fenyi Silver Dragon Water Affairs Fenyi, Jiangxi N/A 60% 

Gaoan Water Affairs Gaoan, Jiangxi 2007 60% 

Jingzhou Water Supply Jingzhou, Hubei 2007 51% 

Jiangling Silver Dragon Water Affairs Jingling, Hubei N/A 100% 

Chongqing Yong Chuan Global Credit Water Yongchuan, Chongqing N/A 100% 

Henan Yinlong (Fugou) Water Supply Fugou, Henan N/A 100% 

Henan Yinlong (Xihua) Water Supply Xihua, Henan N/A 55% 

Zhoukou Silver Dragon Water Affairs Zhoukou, Henan 2006 70% 

Henan Luyi Silver Dragon Water Supply Luyi, Henan 2004 100% 

Guangdong Renhua Silver Dragon Water Renhua, Guangdong 2003 73% 

Huizhou Daya Bay Yiyuan Purified Water Daya Bay, Huizhou, Guangdong 2007 49% 

Guangdong Xinhui Water Affairs Xinhui, Guangdong 2006 50% 

Foundation Gang-Wu (Changzhou) Water Wujin, Jiangxu N/A 40% 

Hainan Xing Cheng Xiang Water Supply Haikou, Hainan N/A 56% 

Sewage treatment contracts 

Company City / Province Year Stake 

Fenyi China Water Environmental Prtn Fenyi, Jiangxi N/A 60% 

Jingzhou China Water Environmental Prtn Jingzhou, Hubei 2006 100% 

Huizhou Daya Bay Qingyuan Env Prtn Daya Bay, Huizhou, Guangdong 2007 49% 

Jiangxi operations contract 

In May 2008, the CWAG entered into a preliminary agreement with Jiangxi Province Administrative 

Assets Group Company who has granted the Group first right of refusal to operate any of some 80 

sewage plants which to be completed in Jiangxi Province before September 2010 with a total daily 

processing capacity of 1.9million m 3 . This is equivalent to 8-9million people. Phase one will include 

45 sewage treatment plants to be completed before September 2009. The estimated total investment 

for the construction of the sewage treatment plants, piping networks and related facilities is 

approximately CNY6billion, including CNY3billion for the sewage treatment works. 


Name: China Water Affairs Group 

Address: Suite 6408, 64/F Central Plaza, 18 Harbour Road, Wan Chai, Hong Kong 

Web: www.chinawatergroup.com 

Duan Chuan Liang (Chairman) 

Du Lin Dong (CEO) 

Li Ji Sheng (Director) 

309 


CHINA 


CHINA WATER INDUSTRY GROUP 

The Sky Hawk Computer Group was listed on the Hong Kong Stock Exchange in 2002. Its computer 

and watch activities were consistently loss making. In 2006 the company moved into the water sector 

and was renamed the China Water Industry Group. The computer peripherals and TechnoMarine 

watch activities were either sold or wound up during 2007 in order to concentrate on its water 

activities. The water activities generated an operating profit of HKD7.9million in 2007. 

100% of the Anhui Dang Shan Water Industry Company (serving Danzhou City of Hainan Province) 

was acquired in 2006 along with 70% of Jining City Haiyuan Water Treatment Company Limited 

(Hendong District in Shandong Province). In December 2006, CWIG acquired Anhui Dang Shan Water 

Industry Co Ltd in Anhui Province. 

In March 2007, 51% of Yichun Water Industry Company Limited was acquired for CNY30million. The 

company provides water and sewerage services in Yichun County, Jiangxi Province. In April 2007, 

Linyi Fenghuang Water Industry Company Limited, a joint venture between CWIG and Linyi City 

Hedong District Water Supply Company Limited was established. CWIG acquired 60% of the JV for 

CNY18million. The JV provides water to Linyi City, Hedong District, Shandong Province. In July 2007, 

CWIG acquired 51% of the Shangqiu Zhengyuan Water Industry Co. Limited and Linyi Ganghua 

Water Industry Company Limited for CNY67.5million. That month, CWIG also subscribed 

CNY21million into the share capital of Jinan Hong Quan Water Company Limited’s Jining City Haiyuan 

Water Treatment Company Limited. 

By the end of 2007, the China Water Industry Group (CWIG) had acquired 7 urban water supply 

enterprises and 4 sewage treatment enterprises in China, with an aggregate water supply capacity of 

2.3million m 3 per day and an aggregate sewage treatment capacity of 100,000m 3 per day, providing 

water supply and sewage treatment services to a population of 4.8million in Shandong, Jiangxi, 

Henan, Anhui and Hainan provinces. 

Letters of intent for joint ventures announced in 2007 

2007 Company / project Water (m 3 /day) Sewage (m 3 /day) 

April Shang Qiu City, Henan Province 1,000,000 0 

August Du Yun City, Guizhou Province 100,000 0 

August Suzhou EDZ, Anhui Province 100,000 120,000 

October Linyi City, Shandong Province 1,500,000 600,000 

The October letter of intent concerns a 51% - 49% joint venture for water supply and sewage 

treatment plants in Lan Shan District, Luo Zhuang District and the subordinated regions including Tan 

Cheng County, Cang Shan County, Ju Nan County, Yi Shui County, Meng Yin County, Ping Yi 

County, Fei County, Yi Nan County and Lin Shu County in Linyi City in Shandong Province. 

During 2008, a series of more substantial acquisitions and JVs were made. The June and July JVs are 

at the letter of intent stage, while the August acquisition is a formal undertaking. In June a joint venture 

was announced with Shenyang Water Development Limited, covering six water supply projects in 

Shenyand City. Also in June a 80% - 20% JV with the Stated-owned Assets Supervisory Committee of 

Geermu Municipal Government (also known as Golmud, Qinghai Province) was established. In July, a 

joint venture was agreed with the Yunfu City Deyu Environmental Protection Company regarding three 

entities in Guangdong Province. In August, eight projects held by Shenzhen South China were 

acquired for HKD700million. These have a total water treatment capacity of 180,000m 3 per day and 

480,000m 3 per day of wastewater treatment and generated revenues of HKD41million and post-tax 

profits of 30million in 2007. 

The company aims to have a water supply volume of 5-10million m 3 per day and a sewage treatment 

capacity of 2million m 3 per day by 2010-11. Letters of intent covering 3.02million m 3 per day of water 

supply and 820,000m 3 per day of sewage treatment capacity have been signed, along with the 

acquisition already announced in 2008. 

310 


CHINA 


CHINA WATER INDUSTRY GROUP 

Letters of intent and acquisitions announced in 2008 

2008 Company / project Water (m 3 /day) Sewage (m 3 /day) 

June Geermu, Qinghai Province 100,000 0 

June Shenyang City 120,000 0 

July Yunan County, Duyuan, Guangdong 0 20,000 

July Yunan County, Yiyuan, Guangdong 0 20,000 

July Yunfu City, Guangdong 100,000 60,000 

August Sihui South China, Shenzhen, 20 year BOT 0 50,000 

August Baoji, Shenzhen, 25 year BOT 0 100,000 

August Sihui Urban, Shenzhen, 30 year BOT 0 30,000 

August Boluo, Shenzhen, 20 year BOT 0 30,000 

August Huidong, Shenzhen, 22 year BOT 0 40,000 

August Huizhou No 4, Shenzhen, 25 year BOT 0 30,000 

August Huizhou No 6, Shenzhen, 22 year BOT 0 30,000 

August Tangshan, Shenzhen 180,000 0 

China Water Affairs Group, profit and loss account 

FY 31/12 (HKDmillion) 2003 2004 2005 2006 2007 

Water provision 0.0 0.0 0.0 0.0 24.4 

Water construction & installation 0.0 0.0 0.0 0.0 28.4 

Sewage treatment 0.0 0.0 0.0 0.0 6.8 

Turnover 109.4 82.8 61.2 70.1 94.9 

Pre-tax profit -8.3 -18.8 -42.5 -95.4 -15.6 

Net profit -9.5 -18.4 -44.3 -95.4 -24.3 


Name: China Water Industry Group 

Address: Room 1207, 12th Floor, West Tower, Shun Tak Centre 

168-200 Connaught Road Central, Sheung Wan, Hong Kong 

Tel (852) 2547 6382 

Fax (852) 2547 6629 

Web: www.chinawaterind.com 

Li Yu Gui (Chairman) 

Zhong Wen Sheng (MD) 

Liu Bai Yue (COO) 

311 


CHINA 


CITIC PACFIC LTD 

CITIC Pacific is the Hong Kong arm of CITIC, China’s leading investment company. It was floated on 

the Hong Kong Stock Exchange in 1996. 50.5% of the equity is held by private and institutional 

investors, 29% by CITIC’s CITIC Hong Kong and 20.5% by the management. 

CITIC Pacific, Profit and loss account 

YE 31/12 (HKDmillion) 2003 2004 2005 2006 2007 

Turnover 26,180 22,912 26,564 47,049 44,933 


Other profits 1,190 3,111 3,341 3,386 4,008 

Net profits 1,305 3,534 3,989 8,272 10,843 


Citic sought five water and waste management projects in Shanghai, Hangzhou, Guangzhou and 

Jiangsu in 2004-05. 

Zunyi 

2004 Zunyi 35 year concession Water treatment 

Citic Pacific holds 75% of the asset and 25% of the operational companies (CGE (Zunyi) Water 

Treatment Co., Ltd), with CGDE (Veolia) holding the remaining 25% and 75% respectively. Zunyi is in 

Guizhou Province. The contract involves acquiring the extant facilities for CNY152million and has a 

total cost of CNY200million. These consist of the Nanjiao and Beijiao water treatment works, each 

having a capacity of 100,000m 3 per day. The asset company is to pay the operational company a set 

of fees up to an annual cap of CNY51million. Citic anticipates a 15% return on its investment in the 

project. 

Changzhou 

2005 Changzhou 30 year concession Water treatment 

CITIC holds 24% of Changzhou CGE Water Co., Ltd, which is responsible for treating and distributing 

water to Changzhou in Jiangsu Province. The four WTWs have a combined capacity of 710,000m 3 per 

day. It is anticipated that the Jiangsu project will involve a total investment of HKD1billion. 

Kunming 

2006 Kunming 30 year concession Water treatment 

CITIC holds 12.5% of Kunming CGE Water Supply Co., Ltd, which is responsible for treating and 

distributing water to Kunming, Yunnan Province. The seven WTWs have a combined capacity of 

1,115,000m 3 per day. 


Name: Citic Pacific Limited 

Address: Citic Tower, 1 Tim Mei Avenue, 

Central, Hong Kong 

Tel: 852 2820 2111 

Fax: 852 2877 2771 

Web: www.citicpacific.com 

Larry Yung Ghi Kin (Chairman) 

Henry Fan Hung Ling (Managing Director) 

Peter Lee Chung Hing (Deputy Managing Director) 

312 


CHINA 


EGUARD RESOURCES DEVELOPMENT CO LTD 

Eguard Resources Development Co., Ltd. was established in as the Beijing Sound Group 1993 and is 

chiefly involved in developing and operating solid waste management projects, along with some urban 

water supply and wastewater treatment services in Hubei. It was partly listed on the Shenzhen It stock 

exchange and remains majority held by Sound Group. The majority of projects are operated under 

Epure, the company’s Singapore listed subsidiary (see company entry for details). 

YE 31/12 (CNYmillion) 2004 2005 2006 2007 

Turnover – Water N/A 5.8 4.1 N/A 

Turnover – Sewerage N/A 12.7 11.2 N/A 

Turnover 81.9 125.7 226.0 344.4 

Operating profits 34.1 35.5 59.6 116.4 

Net profits 25.9 28.1 47.4 86.6 

Earnings Per Share (CNY) 0.13 0.14 0.24 0.43 

Five of Beijing Sound's projects are included under Eguard: 

Jiangsu Shuyang Shuyuan Tap-Water Supply Plant 

100,000m 3 per day as designed, 50,000m 3 per day in the first phase 

Jiangxi Nanchang Xianghu Wastewater Treatment Plant 

300,000m 3 per day in the first phase 

Zhejiang Tonglu Hengcun Tap-Water Supply Plant 

20,000m 3 per day in the first phase 

Hubei Jingmen Xiajiawan Wastewater Treatment Plant 

100,000m 3 per day as designed, 50,000m 3 per day in the first phase 

Inner Mongolia Baotou Nanjiao Wastewater Treatment Plant 

200,000 m 3 per day as designed, 100,000m 3 per day in the first phase and providing 55,000m 3 per 

day of re-usable water 


Name: Eguard Resources Development Co., Ltd. 

Address: 95 Dongshang Road Qingjiang Building 20F 

Yichang, Hubei 443000 

Tel: +86-0717-6319012 

Web: www.eguard-rd.com 

Wen Yibo (Chairman) 

Wu Xiaodong (Chief Financial Officer) 

Zhang Jingzhi (President) 

313 


CHINA 


GLOBAL GREEN TECH GROUP 

Global Green Tech Group (GGTG) is a Hong Kong listed company specialising in a range of cosmetic 

and surfactant products for domestic and industrial use. Golden Idea is a private biotechnology 

company in China engaged in the research and development of wastewater treatment systems as well 

as the design, development, sales and installation of environmental protection equipments other than 

wastewater treatment. Global Success Properties Ltd, a unit of GGTG, currently owns 8.0 % of Golden 

Idea. 

In September 2002, GGTG signed a letter of intent with Golden Idea Bio-technology Engineering 

Group Ltd and Guangxi Liuzhou City Investment and Construction Development Co., Ltd for a joint 

investment in two sewage treatment plants. GGTG and Golden Idea are to acquire from Guangxi 

Liuzhou City Investment the rights for the development and operation of two sewage treatment plants 

at Liuzhou in China. The development and operation rights will last not less than 25 years, with a 

proposed investment of USD61.35million. HKD100million was earmarked for expanding the plant in 

2002. The total project will cost HKD480million. 

The two plants will serve over 800,000 commercial and residential users in the city of Liuzhou. The 

technology development and construction of these two plants are expected to take two years and the 

plants are scheduled for the commencement of operations by the end of 2004, although no 

subsequent announcements have been identified. 

Global Green Tech Group, profit and loss account 

FY 31/12 (HKDmillion) 2003 2004 2005 2006 2007 

Turnover 633.59 624.89 769.87 846.9 1,071.8 

Net profit 92.24 112.21 249.35 271.1 385.5 

Earnings per share (HKDc) 18.4 11.7 24.1 19.7 27.9 

Dividend per share (HKDc) 4.00 2.00 2.00 N/A N/A 


Name: Global Green Tech Group 

Address: Rm 3402-08, 34/F Office Tower Convention Plaza, 

1 Harbour Road, Wan Chai, Hong Kong 

Tel: +852 2522-2811 

Fax: +852 2973-0033 

Web: www.globalgreentech.com 

Jim Lau Jin Wei (Chairman) 

Paul Ng Yuk Yeung (CFO) 

Wong Ying Yin (Director) 

Bang Young Bae (Director) 

314 


CHINA 


GUANGDONG INVESTMENT LTD 

Guangdong Investment Ltd (GDI) is a property and investment company controlled by the municipality 

of Guangdong’s GDH Limited (58%) and Guangdong Trust (11%). Following heavy losses in 1998 and 

1999, the company has been restructured to concentrate on utilities, infrastructure and property. The 

traditional utility activities were in power generation. In December 2000, GDI acquired 81% of GH 

Water Supply (Holdings) for HKD3.96billion as part of a refinancing exercise. GH Holdings owns 99% 

of WaterCo, a company that operates the assets for the transfer of treated bulk water to Hong Kong. 

WaterCo was corporatised in April 2000 and supplies water to parts of Shenzen and Donnguan in 

Guangdong Province along with supplying 75% of Hong Kong’s drinking water under a 30 year nonexclusive 

contract (from August 2000.) This is equivalent to serving 5million people. The latter contract 

accounts for 90% of WaterCo’s revenues. A water piping project (Phase IV renovation project) 

increased the system’s capacity from 1,743million m 3 pa to 2,423million m 3 in 2003 at a cost of 

CNY4.7billion. Two refinancings of the water operations in 2003 and 2005 have reduced financing 

costs by approximately HKD880million pa. GDI’s stake in GH was increased to 86.5% in 2005 and to 

87.4% in 2006. 

Guangdong Investment Ltd, profit and loss account 

Y/E 31/12 (HKDmillion) 2003 2004 2005 2006 2007 

Turnover from water supply 2,958 3,119 3,193 3,226 3,193 

Group turnover 5,164 5,109 5,249 6,056 6,689 

Group operating profits 2,170 1,957 2,376 2,873 3,074 

Pre-tax profit 1,673 1,238 1,728 2,048 2,404 

Pre-tax profits from water supply 829 648 719 1,061 1,296 

Net income 1,107 896 1,304 1,507 1,697 

Earnings per share (HKD) 0.194 0.160 0.227 0.250 0.278 

Under the original agreement, the agreed supply for 1995 was 690million m 3 , increasing by 30million 

m 3 per annum to the designed maximum capacity of 1,100million m 3 pa by 2008. In return for an 

interest free loan granted by Hong Kong to Guangdong Province in 1998, the agreed increase in water 

supply was cut from 30million m 3 per annum to 10million m 3 per annum from 1998, reducing the 

overall volume provided between 1998 and 2004 by 560million m 3 . 

Year,million m 3 pa 2003 2004 2005 2006 2007 

Water to Guangdong 940 1,170 1,225 1,243 1,374 

Water to Hong Kong 810 820 830 517 715 

Total Water Sales 1,740 1,990 2,045 1,860 2,089 

The volume of water sold to Dongguan rose by 79.8% in 2003 and has subsequently continued to rise, 

with revenues in 2007 rising by 19% to HKD870million. In Hong Kong, despite the lowered rate of 

growth in water deliveries since 1998, demand has continued to be significantly lower than the agreed 

volume. In 2001, water used was 61million m 3 below the agreed volume, falling to 56million m 3 below 

the agreed volume in 2002. This meant that the Water Supplies Department had to pay 

HKD188.19million in 2001 and HKD172.76million in 2002 for water that it did not use. The Hong Kong 

Water Supply Agreement for 2006 to 2008 was concluded between the Government of Hong Kong 

Special Administrative Region and the Guangdong Provincial Government in 2005. The total annual 

fixed amount for the water sales to Hong Kong is HKD2,494.8million, a decrease of HKD34.9million for 

the 2006 to 2008 sales. 


Name: Guangdong Investment Ltd 

Address: 28-29/F Guangdong Investment Tower, 

148 Connaught Road, Central District, Hong Kong SAR, China 

Tel: +852 2860 4368 

Fax: +852 2528 4386 

Web: www.gdi.com.hk 

Wenyue Li (Chairman) 

Hui Zhang (MD) 

Wai Keung Li (CFO) 

315 


CHINA 


GUOZHEN ENVIRONMENTAL PROTECTION 

Guo Zhen Environmental Protection (GZEP, formerly called the Anhui Guozhen Environmental 

Protection Energy-Saving Technology Company) is owned by the Anhui Guozhen Group Ltd. Co. This 

is a privately held company based in Anhui Province that has net assets of CNY400million. GZEP has 

been the lead builder for some 30 wastewater treatment plants and has been involved in the 

construction of over 200 other wastewater treatment plants. 

A total of 10 BOT and TOT contract awards have been identified, the first five of which were 

generating revenues of approximately USD13million pa in 2005. These contracts serve approximately 

6.0million people. 

2000: BOT for the Bozhou City Wastewater Treatment Plant with a capacity of 80,000 tonnes/day. 

2001: 15 year operating contract for two wastewater treatment plants in Shenzhen City (total city 

population of 1.285million in 2005). 

2001: BOT project in Guangdong Province, the Xinhui East Wastewater Treatment Plant. The 

wastewater treatment plant serving the Xinhui District of Jiangmen (Guangdong Province) opened in 

October 2003. The district invested CNY36million (EUR4million) for the land and a supporting network 

of sewage pipelines. Guozhen is responsible for the WWTW’s CNY42million investment and 

operation. The city has to pay CNY0.67 (EUR0.07) for each tonne of sewage treated, compared with 

CNY1.2 (EUR0.13) it would have spent if it had conducted its own investing and management. The 

municipality had estimated that the 80,000m³ per day WWTW would have cost CNY280million to 

develop and finance. Xinhui had a population of 735,500 in 2005. 

2003: First BOT project in Anhui Province, the Zhuzhuanjing Wastewater Treatment Plant. 

2003: 30 year TOT for Xu Zhou wastewater treatment plant with capacity 165,000 tonnes/day (city 

population of 1.662million in 2005). 

2004: 20 year TOT for the Changsha Second Wastewater Treatment Plant with a capacity of 140,000 

tonnes/day (city population of 2.051million in 2005). 

2005: The management of the Shenzhen Caopu Sewage Treatment Plant was taken over in April. The 

treatment capacity of Shenzhen Buji Caopu Sewage Treatment Plant is 150,000 m 3 per day. 

2007: BOT for Lankao County (25,000m 3 per day), Suqian City Yanghe (10,000 m 3 per day) and 

Wuhu City Tranmenshan (Phase 1, 60,000m 3 per day). 


Name: GuoZhen Environmental Protection 

Address: 699 Changjing West Road 

Hefei, Anhui, China 

Tel: 0551-531 9529 

Fax: 

0551-532 2901 

Web: 

www.gzep.com.cn 

Jian Xingchao (Chief Engineer) 

Wu Hao (Vice President) 

Ms Duan Zhuan Jian (Chairman) 

316 


CHINA 


HONG KONG & CHINA GAS AND LIGHT 

Hong Kong & China Gas and Light (Towngas) is a Hong Kong based power utility which has recently 

embarked on an investment programme in China resulting in 25 joint venture projects to date. 

Towngas’ Han Yan Water gained its first water contract in China in 2005 and currently has three such 

contracts covering 1.8million people in total. These are for Tianjin, Wujiang (Jiangsu province) and in 

Wuhu (Anhui province) along with managing an integrated water supply and wastewater joint venture 

in Suzhou Industrial Park, Suzhou, Jiangsu province. Water revenues were HKD209.6million in 2006 

and HKD260.9million in 2007. 

In May 2006, Towngas announced that it is planning to take a 50% stake in a CNY3.0billion water 

project in Tianjin. This project will have an initial handling capacity of 100million m 3 pa and could be 

expanded to 400million m 3 pa a year in the future. 

In July 2005, Towngas agreed to pay CNY776million for an 80% stake in Wujiang Water Investment 

Company in Jiangsu province. This involves a total investment of CNY970million for a 30 year 

concession for supplying water to the Wujiang administrative zone. The first phase of the project with 

Towngas, expected to be completed this year, will involve CNY600million, with a treatment capacity of 

330,000m 3 pa, with the capacity rising to 530,000m 3 pa which started in 2007-08. Water is currently 

supplied to 180,000 households in Wujiang, a city with a population of 780,000. Water consumption in 

2005 was forecast at 115million m 3 , while demand for water in Wujiang has grown at 20% per annum 

since 2001. 

In June 2005 Towngas gained a 75% stake in a water supplier in Anhui province for CNY225million. 

The 30 year CNY700million concession is for part of the city of Wuhu, which has a total population of 

2.25million, with the utility supplying 85million m 3 of water in 2005. 

Towngas, profit & loss account 

Y/E 31/12 (HKDmillion) 2003 2004 2005 2006 2007 

Group turnover 7,289 8,154 9,351 13,465 14,225 

Pre-tax profits 3,800 3,923 5,922 5,890 9,334 

Net profits 3,051 3,287 5,281 5,862 9,269 

Earnings per share (HKD) 0.54 0.58 0.95 0.879 1.391 


Name: Hong Kong & China Gas Company Ltd 

Address: 23rd Floor, 363 Java Road, North Point, 

Hong Kong 

Tel: (852) 2963 3483 

Fax: (852) 2516 7368 

Web: www.towngas.com 

Lee Shau Kee (Chairman) 

Alfred Chan Wing Kin (CEO) 

John Hon-Ming Ho (CFO) 

James Kwan Yuk Choi (COO) 

317 


CHINA 


JIANGXI HONGCHENG WATERWORKS CO 

The Jiangxi Hongcheng Waterworks Co was partly floated on the Shanghai Stock Exchange in June 

2004. The IPO raised CNY264million, CNY256million of which is to be used in expanding the water 

supply network through three projects designed to expand supply capacity from 900,000 m 3 per day to 

1.2million m 3 per day by 2007. Electricity accounted for 38% of its production costs in 2003. Water is 

charged at CNY0.553 per m 3 and has been fixed at this level for two years, with limited scope for 

further increases. The company is responsible for 85% of Nanchang’s water supplies. 

During 2005, the company supplied approximately 279.56million m 3 of water from its Qingshan, 

Changyang, Xiazheng Street, Niuhang and Changling water plants. In 2007, 304.3million m 3 of water 

was supplied and 21.0million m 3 of sewage was treated. 

In 2005, the Company acquired a 51% stake in an environmental protection company that has an 

exclusive right to operate a Jiujiang-based company engaged in the treatment of waste water. 

Jiangxi Hongcheng Waterworks Co, profit and loss account 

Y/E 31/12/(CNYmillion) 2003 2004 2005 2006 2007 

Turnover – water 127.2 133.1 152.6 168.0 170.5 

Turnover - sewage 0.0 0.0 0.0 2.5 12.1 

Turnover 127.2 133.1 151.6 169.5 181.7 

Operating Profit 44.0 39.1 43.7 47.1 48.0 

Net Profit 25.5 25.5 27.3 28.8 29.4 

EPS (CNY) 0.283 0.214 0.195 0.206 0.210 


Name: Jiangxi Hongcheng Waterworks Co 

Address: 98 Guanyin Road 

Nanchang, Jiangxi, 330001 China 

Tel: 86 791 521 0336 

Fax: 86 791 522 6672 

Web: www.jxhcsy.com 

Mao Mujin (Chairman) 

Liu Zhong (President) 

Li Xuelang (Deputy General Manager, Director) 

318 


CHINA 


NANHAI DEVELOPMENT COMPANY LIMITED 

Nanhai Development Company Limited (NDC) was founded in 1992 and supplies drinking water and 

designs and installs water supply systems in Nanhai and surrounding areas in Guangdong Province. 

NDC also has a 60% interest in a water provision company based in Jiujiang, Jiangxi Province. The 

company was listed on the Shanghai Stock Exchange in December 2000. 36.5% of its equity is held 

by the Nanhai Water Supply Group. The municipality of Nanhai has 1.10million people. The company 

seeks to raise water supply to 1.32million m 3 per day. In 2005, the Company supplied a total of 

274.13million m 3 of water against 304.7million m 3 in 2004. 

Nanhai Development Company Limited, profit and loss account 

Y/E 31/12 (CNYmillion) 2003 2004 2005 2006 2007 

Turnover – Water supply 253.7 272.4 308.6 327.0 356.8 

Turnover – Sewerage 0.0 0.0 N/A N/A 27.8 

Total turnover 253.7 272.4 317.1 365.2 409.4 


Net profit 64.1 71.5 77.5 86.3 92.9 

EPS (CNY) 0.31 0.262 0.285 0.318 0.343 

DPS (CNY) 0.20 0.25 0.25 0.20 0.18 

In 2007, the company invested CNY59million in upgrading the Pinzhou Sewage Treatment Project, 

which it will operate for 24 years. Capacity will rise from 42,500 m 3 per day at the outset to 50,000 m 3 

per day from 2010. 


Name: Nanhai Development Company Limited 

Address: 21 st Floor Jianhang Building, 

Guicheng Nanhai Avenue, 

Nanhai District, Foshan, Guangdong, 52820 China 

Tel: +86-757-8628-0996 

Fax: +86-757-8623-8565 

Web: www.nhd.net.cn 

He Xiangming (Chairman) 

Feng Chenggui (President) 

Chen Huixia (Finance Director) 

319 


CHINA 


NINGBO FUDA COMPANY LIMITED 

Ningbo Fuda Company Limited (Fuda) is a consumer electronics company, which is also involved in 

water distribution. In 2005, Fuda supplied 155million m 3 of drinking water, which rose to 164million m 3 

in 2007. 

Y/E 31/12/(CNYmillion) 2003 2004 2005 2006 2007 

Turnover - Water - - 119.3 122.7 123.8 

Turnover 1,114.1 1,279.9 1,068.8 1,420.5 1,394.8 


Net Profit 70.8 77.7 22.7 40.7 42.4 

EPS (CNY) N/A 0.21 0.6 0.11 0.10 


Name: Ningbo Fuda Company Limited 

Address: No.355 Yangming West Road 

Yuyao, Zhejiang 315400 China 

Tel: +86-574-628-14275 

Web: www.fuda.com 

Bai Xiaoyi (Chairman) 

Xu Liagen (President / Party Secretary) 

Zhou Guohua (Finance Director) 

320 


CHINA 


NWS HOLDINGS LTD 

NWS is the Hong Kong Stock Exchange listed services arm of the New World Development Company. 

The company was listed on the Hong Kon Stock Exchange in 1997. NWS has been involved in the 

water sector in China since 1993 through Sino French Holdings (Hong Kong), its 50-50 joint venture 

with Suez Ondeo. Total water treatment capacity at the start of 2004 was 3.95million m 3 per day, rising 

to 4.38million m 3 per day by the end of 2005, with 21 water projects with a total capacity of 5.72million 

m 3 per day in 2007. Operating profit of NWS’s water activities were HKD80.6million for 2005, rising to 

HKD87.4million in 2006 and HKD102.2million in 2007. In April 2008, NWS & Suez Environnement 

paid EUR140million for 15% of Chongqing Water Group. CWG owns and operates 32 water treatment 

works and 35 sewage treatment works in Chongqing and aims to expand its services into 

neighbouring areas. 

NWS Holdings Ltd, profit and loss account 

YE 31/06 (HKDmillion) 2003 2004 2005 2006 2007 

Turnover 5,770 12,553 10,286 12,544 15,047 

Operating profits 257 953 -83 342 845 

Other profits 1,316 1,172 3,201 1,667 1,690 

Net profits 1,213 1,538 2,886 1,657 2,005 


Holdings' attributable interest (%) 

Project 

Capacity NW Contract Region 

(m 3 per day) stake expiry 

Macau Water Plant 330,000 42.5 2010 Macau 

Zhongshan Tanzhou Water Plant 60,000 (Phase I) 

90,000 (Phase II) 29 2027 Guangdong 

Zhongshan Dafeng Water Plant 200,000 (Phase I) 

200,000 (Phase II) 33.06 2020 Guangdong 

Zhongshan Quanlu Water Plant 500,000 33.06 2020 Guangdong 

Dongguan Microfiltration Equipment N/A 25 2014 Guangdong 

Plant 

Nanchang Water Plant 50,000 (Phase I) 

50,000 (Phase II) 25 2023 Jiangxi 

Baoding Water Plant 260,000 27.5 2020 Hebei 

Siping Water Plant 118,000 25 2030 Jilin 

Zhengzhou Water Plant 360,000 25 2031 Henan 

Xinchang Water Plant 100,000 25 2032 Zhejiang 

Changtu Water Plant 50,000 35 2029 Liaoning 

Panjin Water Plant 110,000 30 2032 Liaoning 

Shanghai Spark Water Plant 100,000 25 2031 Shanghai 

Shanghai SCIP Water Treatment Plants Wastewater - 

50,000 

Industrial Water - 

200,000 

Demineralized 25 2052 Shanghai 

Water - 4,800 

Qingdao Water Plant 543,000 (Phase I) 

183,000 (Phase II) 25 2027 Shandong 

Chongqing Water Plant 380,000 (Phase I) 

160,000 (Phase II) 30 2052 Chongqing 

Sanya Water Plant 235,000 25 2033 Hainan 

Tanggu Water Plant 310,000 25 2039 Tianjin 

Changshu Water Plant 675,000 24.5 2036 Jiangsu 

Chongqing Tangjiatuo Waste Water Plant 300,000 50 2036 Chongqing 

321 


CHINA 


NWS HOLDINGS LTD 


Name: NWS Holdings Ltd 

Address: New World Tower 2, 18 Queen’s Road, 

Central, Hong Kong 

Tel: 852 2131 0600 

Fax: 852 2131 0611 

Web: www.nwsh.com.hk 

Henry Cheng Kar Shun (Chairman) 

William Doo Wai-Hoi (Deputy Chairman) 

Norman Chan Kam Ling (Chief Executive Officer) 

322 


CHINA 


QIANJIANG WATER RESOURCES 

Qianjiang Water Resources Development Co is a municipally based company providing water supply 

to Qianjiang City in Zhejiang Province (1999 population 313,000). QWR had its IPO on the Shanghai 

Stock Exchange in October 2000. Water sales in 2005 were 96.09million m 3 . 

Y/E 31/12/(CNYmillion) 2003 2004 2005 2006 2007 

N/A N/A 110.3 134.5 179.1 

Turnover 216.2 155.5 240.3 375.9 377.0 

Operating Profit N/A 18.7 36.1 51.3 23.9 

Net Profit 28.9 16.5 22.0 17.7 33.6 

EPS (CNY) 0.11 0.06 0.08 0.06 0.12 

In July 2008, the company acquired 70% of Lishui Water Supply and Drainage Company, from the 

Assets Supervision and Administration Commission of the city for CNY94.421million. Lishui City has a 

population of 2.5 million at the prefecture level. 


Name: Qianjiang Water Resources 

Address: 3 Santai Shan Road, Hangzhou, 

Zhejiang, China 

Tel: +86-571-8797-4386 

Web: www.qjwater.com 

Hi Zhonghui (Chairman) 

Zhang Disheng (Vice Chairman, President) 

Wang Zhaohui (CFO) 

323 


CHINA 


SHANGHAI INDUSTRIAL HOLDINGS 

Shanghai Industrial Holdings Limited (SIHL) is a broadly based infrastructure, logistics and technology 

company, which is 58% held by the Shanghai municipal government. The company was partly floated 

on the Hong Kong Stock Exchange in 1996. In 2003, the company decided to enter the Chinese water 

and sewage treatment BOT market. The company originally planned to invest a total of CNY10billion 

by 2006 in operating water supply, sewage treatment and sewerage networks, with the objective of 

becoming one of the top three water services companies in the Chinese market. By the end of 2007, 

the company had HK5.2 billion in water and wastewater assets. 

Shanghai Industrial Holdings, profit and loss account 

YE 31/12 (HKDmillion) 2003 2004 2005 2006 2007 



Net income 1,259 1,378 1,028 1,258 2,007 

Earnings per share (HKD) 1 1 1 1 1 

In August 2003, SIHL formed a CNY500million 50:50 joint venture with the state-held China Energy 

Conservation Investment Corporation (CECIC), now called General Water of China Co. The joint 

venture’s China Water and Sewage Treatment Company and Zhong Huan Water Treatment 

Construction Limited Corporation started operations in November 2003. China Water and Sewage 

Treatment subsequently signed heads of agreements with Xiamen Water Services Group and 

Zhenjiang New Area Administrative Commission in Jiangsu province for water services investment 

projects. Total investment in the two projects will exceed CNY1 billion. 

As at the end of 2007, General Water of China had 14 project companies in nine provinces with a total 

daily capacity of 4,543,000 m 3 per day. These entities had total assets of HKD5,200million in 2007, 

with revenues of HKD466 million, an increase of 33.9% over 2006. 

The Xiamen GWC Sewage and Wenzhou GWC Zhengyuan have been completed and are in 

operation, while the projects held by General Water of China (Chongqing) Co. Ltd. and General Water 

of China (Huzhou) Co. Ltd. were put into trial operation in the second half of 2007. Revenues of 

Xiamen GWC Sewage and Wenzhou GWC Zhengyuan were HKD233 million and HKD41.78 million 

respectively in 2007. The projects held by General Water of China (Wenzhou) Co. Ltd. and General 

Water of China (Shenzhen) Co. Ltd. are entering service in 2008. 2008. Preliminary works for the City 

Water supply project in Suifenhe, commenced in the first half of 2007 and completion and 

commencement of production are expected in 2010. 

324 


CHINA 


SHANGHAI INDUSTRIAL HOLDINGS 

Projects Stake Investment 

(CNYmillion) 

Capacity 

(m 3 / day) 

Operation 

period 

Xiamen GWC Water Supply Ltd, Fujian 45% CNY 105 1,200,000 30 years, 2006 

Xiamen GWC Sewage Treatment Ltd 55% 356 559,000 30 years, 2006 

Bengbu Water Supply Company, 60% 155 430,000 30 years 

Anhui province 

Xiangtan Water Supply Company, 70% 140 

30 years 

Hunan province: Water 


425,000 

100,000 

Eastern Huzhou Water Sewage 100% 90 10,000 22 years 

Treatment, Zhejiang province (BOT) 

Changshou Chemical Industrial Zone, 

Chongqing (BOO), Water Sewage 

treatment 

100% 589 240,000 

40,000 

50 years 

Xianyang Water Supply Company, 50% 85 180,000 30 years, 2007 

Shaanxi province 

Xianyang Water Supply Project 

100% 568 300,000 30 years 

(re-routing of water distribution, BOT) 

Longhua Sewage Treatment, 

Shenzhen province (BOT) Phase 2 

100% 

100% 

160 

N/A 

150,000 

400,000 

22 years, 2006 

N/A 

Huzhou Water Supply Project (BOT), 100% 824 200,000 34 years, 2009 

Zheijiang province 

Eastern Wenzhou Sewage Treatment, 100% 203 100,000 27 years, 2007 


Central Wenzhou Sewage Treatment, 70% N/A- 200,000 N/A 


Suifenhe, water supply, 

100% N/A 110,000 N/A 

Heilongjiang province 

Xiangtan, sewage treatment, Hunan 100% N/A 100,000 N/A 

China Water and Sewage Treatment have in turn set up a joint venture with the Xiamen Water 

Services Group to operate the principal water supply and sewage treatment facilities in Xiamen. The 

city is one of China’s five Special Economic Zones and contract covers a water supply capacity of 

1.0million m 3 per day and a sewage treatment capacity of 514,000m 3 per day. Capacity for these two 

projects were increased to 1,200,000 m 3 per day and 559,000 m 3 per day respectively during 2007. 

A second joint venture has been formed with the Zhangjiang New Area Administrative Commission in 

Jiangsu Province for the exclusive right to operate water supply and sewage treatment facilities in 

Zhenjiang New Area. China Water and Sewage Treatment is expected to invest by 2006 a total of 

CNY250 million in a 100,000m 3 per day waterworks BOT project, a 60,000m 3 per day sewage 

treatment plant TOT (Transfer-Operate-Transfer) and BOT project, and a sewerage network project for 

water supply and sewage collection in the Zhanjiang New Area. 


Name: Shanghai Industrial Holdings Ltd. 

Address: Harcourt House, 39 Gloucester Road, 

Hong Kong, HK 

Tel: 00852 2529 5652 

Fax: 00852 2529 5067 

Web: www.sihl.com.hk 

Web: www.cecic.com.cn 

Cai Lai Xing (Chairman) 

Cai Yu Tian CEO) 

Qu Ding (Deputy CEO) 

Cherie Chan Yat Ying (CO) 

325 


CHINA 


SHANGHAI CHENGTOU HOLDING CO LTD 

Shanghai Chengtou, formerly the Shanghai Municipal Raw Water Co., Ltd. (SMRW) was founded in 

1992 and abstracts water from the Yangtze and Huangpu rivers for treatment at the Shanghai 

municipality’s water treatment stations. The company builds and operates the pumping stations, 

canals and reservoirs necessary for the bulk water provision to the city. 52% of SMRW's shares are 

held by the Shanghai State Assets Management Bureau. The Company had six subsidiaries and 

major associates. 

During 2005, SMRW supplied approximately 1.7billion m 3 of water and treated a further 0.6billion m 3 of 

wastewater. In addition, SMRW supplies bulk water to Veolia Water’s 2002 Shanghai Pudong 

contract. During 2007, the company supplied 1.258 billion m 3 of raw water and 0.177billion m 3 of 

treated water and treated approximately 0.621 billion m 3 of wastewater. Sales of water and 

wastewater accounted for 44% and 23% of total 2007 revenues respectively. 

Shanghai Municipal Raw Water Co., profit and loss account 

YE 31/12 (CNYmillion) 2003 2004 2005 2006 2007 

Water supply turnover 713.0 N/A N/A N/A N/A 

Water treatment turnover 240.1 N/A N/A N/A N/A 

Total turnover 969.7 971.2 1,010.6 1,202 1,210 

Operating profits 450.4 504.4 618.4 626 618 

Net income 429.4 433.4 391.1 602 525 

Earnings per share (CNY) 0.228 0.226 0.200 0.317 0.277 


Name: Shanghai Municipal Raw Water Co. Ltd. 

Address: 5/F, 818 Sichuan Road North, 

Shanghai, 200085, China. 

Tel: +86 21 6356 4432 

Fax: +86 21 6356 4880 

Web: www.rawwater.com.cn 

Liu Qiang (Chairman) 

Shoupei Wu (President) 

Bai Lei (Financial Controller) 

Gu Yuliang (Chief Engineer) 

326 


CHINA 


SHANGHAI URBAN CONSTRUCTION GROUP 

China’s largest wastewater treatment BOT project, Shanghai Zhuyuan No.1 WWTP, with a capacity of 

1.7 million m 3 per day was originally awarded to Shanghai Youlian Development Company (45%), 

Huajin Information Investment (40%) and Shanghai Urban Construction Group (15%) in 2002. This 

group in turn gained the tender for Zhuyuan No.2 WWTP project in 2004. Shanghai Youlian 

subsequently withdrew from the two WWTP projects due to the changed financing policies in China. In 

2005 Shanghai Urban Construction Group won the Zhuyuan No.2 tender and was awarded a twentyfive 

year concession. At the end of the concession, the facility will be handed over to the Shanghai 

Chengtou Corporation. 

The Zhuyuan No.2 Sewage Treatment Plant will cost CNY600 million and has a design capacity of 

500,000m 3 per day and will mainly deal with sewage from the northern part of the city, such as 

Yangpu District. Construction started in late 2005 and was continuing in 4Q 2007. Treated sewage 

from the facility will reach Level 2 of the state sewage discharge standard, above that of most local 

facilities. The project is to be supported in part through a World Bank loan of USD200 million for 

various urban environmental projects in the city. The original bid by Shanghai Youlian Group was the 

lowest with a price of CNY0.299 per tonne. 


Name: Shanghai Urban Construction Group 

Address: 654 Mengzi Road, 


Tel: +86 21 630 17388 0086 

Fax: +86 21 630 18245 

Web: www.sucgcn.com 

Zhu Jiaxiang (Chairman) 

Zhu Renwei Jiang Xianfu (Vice Chairman) 

Chen Jinzhang (Chief Financial Supervisor) 

327 


CHINA 


SHANGHAI YOUNG SUN INVESTMENT CO LTD 

Shanghai Young Sun Investment Co., Ltd. was founded in 1995. It owns and operates three sewage 

treatment plants in Shanghai, with an aggregated daily treatment capacity of 145,000 m 3 per day. It 

also has two subsidiaries and one affiliate, of which one is in Shanghai, providing consulting services 

of urban infrastructure investment, operation and management, and two based in Shanghai and 

Chengdu, Sichuan Province, engaged in water treatment business. 

Y/E 31/12 (CNYmillion) 2003 2004 2005 2006 2007 

Turnover 42.0 49.8 50.8 109.2 185.9 


Net Profit 22.6 31.1 32.7 36.9 13.1 

EPS (CNY) 0.09 0.13 0.13 0.15 0.05 


Name: Shanghai Young Sun Investment Co., Ltd. 

Address: Block D, Building 10 555 Xu Jiahui Road, 


Tel: +86 21 639 01001 

Fax: +86 21 639 01001 

Zhu Shiyin (Chairman) 

Qu Xia (CFO, General Manager) 

328 


CHINA 


SHENZHEN KONDARL (GROUP) CO LTD 

Shenzhen Kondarl (Group) Co., Ltd. was established in 1979. Its chief activity is in food production. In 

2005 and 2007, 17% of itsmillion revenues came from water distribution, compared with 19% in 2006. 

Y/E 31/12 (CNYmillion) 2003 2004 2005 2006 2007 

Turnover - water N/A N/A 136.4 142.3 N/A 

Turnover 846.7 964.2 862.3 737.9 847.8 

Operating Profit 56.9 75.5 0.8 -47.2 11.3 

Net Profit 5.4 7.3 -112.6 -126.7 24.3 

EPS (CNY) N/A 0.02 -0.29 -0.32 0.06 


Name: Shenzhen Kondarl (Group) Co., Ltd. 

Address: Level 2, Ji Hao Building No. 1086 Shen Nan East Road 

Luo Hu District, Shenzhen, SHZ 518003 

Tel: +86-0755-254-25020 

Fax: +86-0755-254-20155 

Web: www.kondarl.com 

Luo Aihua (Chairman & President) 

Zhu Wenxue (Chief Financial Officer) 

329 


CHINA 


SICHUAN GUANGAN AAA PUBLIC CO LTD. 

Sichuan Guangan AAA Public Co., Ltd. (AAA Public) was established in 1999. The company operates 

hydroelectric generation and distribution services and distributes water in part of Sichuan Province, 

including Guangan, Yuechi County and Huaying. In 2005, the company sold 10.7 million m 3 of water. 

Y/E 31/12/(CNYmillion) 2004 2005 2006 2007 

Turnover - Water N/A N/A N/A 33.6 

Turnover 220.7 260.2 389.4 456.9 

Operating Profit 50.7 72.5 71.5 56.6 

Net Profit 24.3 30.4 29.5 15.5 

EPS (CNY) 0.17 0.15 0.15 0.08 

In November 2007, the company announced that it was acquiring Sichuan Linshui Aizhong Water Co 

Ltd, a water utility company, from Chinese state-owned Sichuan AAA Investment Holding Group Co 

Ltd (SA). Previous to this, SG AAA held 10% of SLAW’s equity. Along with acquiring Sichuan 

Wusheng Aizhong Water Co Ltd and two gas companies, the transactions are worth CNY89 million. 


Name: Sichuan Guangan AAA Public Co., Ltd 

Address: 86 North Qujiang Road 

Guangan District, Guangan, Sichuan 638001 

Tel: +86-826-298-3049 

Fax: +86-826-298-3358 

Web: www.sc-aaa.com 

Luo Qinghong (Chairman) 

He Tulin (Chief Financial Officer) 

Chen Yunhai (President) 

Li Mingping (Party Secretary) 

330 


CHINA 


SUZHOU NEW DISTRICT HI-TECH INDUSTRIAL CO LTD 

Suzhou New District Hi-Tech Industrial Co., Ltd. (SNDHT) is responsible for the development and 

operation of water, road, gas and power services for Suzhou's Hi-Tech Industrial Development Zone. 

24.5% of its shares were floated in August 1996, and the company is currently 48.6% held by Suzhou 

New District Economic Development Group. 

There are 400 industrial facilities and 100,000 residents in the area. Demand for water is currently in 

excess of 300,000m 3 per day, provided by the city. The dedicated Suzhou Xinning Water Works was 

opened in 2000, providing 150,000m 3 per day, which can be doubled at a later date. 

Suzhou New District Hi-Tech Industrial Co. Ltd., profit and loss account 

Y/E 31/12 (CNYmillion) 2003 2004 2005 2006 2007 

Turnover – Public Service N/A N/A 29.2 29.5 66.7 

Turnover 813.2 1,524.1 1,518.6 1,953.4 2,467.8 


Net income 108.7 129.8 143.0 155.4 222.3 

Earnings per share (CNY) N/A 0.158 0.174 0.189 0.266 

In December 2002, Suzhou New District Hi-Tech acquired a 25% stake in Suzhou New District 

Xinning Running Water Development Co Ltd, a water utility company, from Suzhou New District 

Economic Development Group Corp, a unit of Chinese state-owned Suzhou government, for CNY17.2 

million. 


Name: Suzhou New District Hi-Tech Industrial Co., Ltd. 

Address: 25/F Jinhe Building, 35 Sishan Road, 

New District, Suzhou, Jiangsu Province 215011, China 

Tel: +86 512 680 72581 

Fax: +86 512 809 9281 

Web: www.sndht.com 

Ji Xiangqun (Chairman) 

Gao Jianping (Vice Chairman) 

Xu Ming (President) 

Zhuang Liangbao (Finance Director) 

331 


CHINA 


TIANJIN CAPITAL ENVIRONMENTAL PROTECTION 

Tianjin Capital Environmental Protection Company Limited (TCEP) is involved in sewage treatment 

and other municipal services and operates in Tianjin and Guizhou Province. During 2005 it operated 

nine subsidiaries and had a total sewage treatment capacity in the Tianjin region of 1.49 million m 3 per 

day and processed 131 million m 3 of sewage. At the start of 2006, TCEP’s services covered the 

South-western regions, Yangtze River, and Jiangsu and Zhejiang provinces. TCEP’s sewage 

treatment plants capacity outside Tianjin also increased to 1.02 million m 3 per day. In 2007, the 

company’s sewage treatment plants had a capacity of 2.485 million m 3 per day, compared with 2.365 

million m 3 per day in 2006. Potable water sale volumes rose from 31.6 million m 3 in 2006 to 34.0 

million m 3 in 2007 and recovered waster sales rose from 1.8 million m 3 to 3.3 million m 3 during the 

same period. 

Y/E 31/12 (CNYmillion) 2003 2004 2005 2006 2007 

Turnover – Sewage N/A N/A 504.5 651.7 N/A 

Turnover – Potable water N/A N/A N/A 30.9 N/A 

Turnover – Water recycling N/A N/A 12.5 23.1 N/A 

Turnover 629.7 713.7 580.5 770.3 938.6 

Operating profits N/A 514.7 338.5 357.2 408.4 

Net income 278.0 311.9 177.5 153.3 176.0 


The company is currently expounding its activities into other provinces. 63% of the company’s equity is 

indirectly held by the Tianjin Urban Construction Bureau. 

2001 Tianjin 26 year BOT 7,500,000 sewage treatment 

TCEP’s main contract is with the Tianjin Sewage Company. TCEP acquired a series of sewage 

treatment works serving the city that was either in development or not complying with the appropriate 

standards. The Company processed 131 million m 3 of sewage during 2005 against 227 million m 3 in 

2004, with revenues of CNY253 million. This reflects the works being carried out during 2005. The 

Dongjiao sewage water treatment plant treated 123 million m 3 of sewage during the year, against 132 

m 3 in 2004. The original Jizhuangzi sewage treatment plant (260,000m 3 per day) was rehabilitated 

during 2005 and is undergoing trials with a second plant (280,000m 3 per day). The other treatment 

plants, at Jizhuangzi (540,000m 3 per day), Xianyanglu and Beicang are being replaced or upgraded to 

meet contemporary standards. TCEP’s sewage treatment plant capacity in the Tianjin region has 

reached 1,490,000m 3 per day. 

2005 Baoying 26 year BOT 250,000 sewage treatment 

TCEP set up a joint venture in June 2005, for the Baoying Sewage Water Treatment Project. Baoying 

Capital Water Co., Ltd. has a registered capital of CNY38 million, 70% held by TCEP. Baoying Capital 

Water Co., Ltd. will build and operate a sewage water treatment plant with a capacity of 25,000m 3 per 

day, which can be expanded to 50,000m 3 per day. The total investment for the first phase of the joint 

venture was CNY93.4 million. 

2005 Hangzhou 26 year TOT 2,000,000 sewage treatment 

The Hangzhou Qige Sewage Treatment Plant joint venture was signed in June 2005 for a 26 year 

Transfer-Operation-Transfer (TOT) Project. The Hangzhou Tianjin Capital Water Company Limited 

has a registered capital of CNY257.5 million, 70% held by TCEP. Phase I of Hangzhou Qige Sewage 

Water Treatment Plant has commenced operation, with a capacity of 400,000m 3 per day, with phase II 

(200,000 m 3 per day) still under construction. The total investment is estimated at CNY881 million. 

2005 Fuyang 30 year licence 500,000 sewage treatment 

In August 2005, TCEP’s 98% held Fuyang Capital Water Co., Ltd. gained the contract for the Anhui 

Fuyang Sewage Water Treatment Project. The sewage plant’s treatment capacity is 100,000m 3 per 

day, and has commenced operation. The project is under licensed operation, the transfer price was 

approximately CNY102 million, with a term of 30 years. 

2005 Honghu TOT 350,000 water & sewage treatment 

332 


CHINA 


TIANJIN CAPITAL ENVIRONMENTAL PROTECTION 

The Hubei Honghu Sewage and Water Supply Project started in December 2005, with TCEP holding 

98% of Hubei Honghu Capital Water Co., Ltd., which has acquired three facilities under a TOT 

contract; the sewage water treatment plant of Honghu city (70,000m 3 per day) and two water 

treatment plants with designed capacity of 80,000m 3 and 30,000m 3 per day. The total investment 

amount of the sewage treatment portion was CNY50 million. 

2005 Qujing 26 year BOT 750,000 water & sewage treatment 

A cooperation agreement was signed in June 2005, for recycled water supply and sewage treatment in 

the central urban area of Qujing in Yunan. A joint venture is being established with the Qujing City 

Recycled Water Supply and Sewage Water Treatment Corporation, to acquire the sewage treatment 

plant and the water supply plant through a 30 year TOT project. The Qujing Sewage Treatment Plant 

has a daily treatment capacity of 80,000m 3 (to be expanded to 160,000m 3 per day) and the No. 1, No. 

2 and No. 3 Water Supply Plants have daily production capacities of 80,000m 3 , 60,000m 3 and 

60,000m 3 respectively. The acquisition price of the assets will be approximately CNY290 million. 

Qujing Capital Water Co., Ltd. is 90% held by TCEP. 

2008 Xian 25 year TOT 1,000,000 sewage treatment 

In March 2008, TCEP acquired sewage treatment works of the Xian Capital Water Company Limited 

along with a 25 year operations contract after a tender process for CNY643 million. The plants were 

held by the Xian Sewage Water Treatment Plants and Xian Infrastructure Investment and Construction 

Company (XICC). Sewage processing volumes are contracted to be 102,000 m 3 per day for the first 

year of the contract and 114,000 m 3 per day for the rest of the contract at the Xian Sewage Water 

Treatment Plant and 127,500 m 3 per day for the first year and 142,500 m 3 per day for the rest of the 

contract at the XICC Purification Centre. The two plants have a total maximum capacity of 310,000 m 3 

per day. 

TCEP also has three industrial effluent treatment contracts serving: [1] the Tianjin Port Bonded Area, 

one of the functional areas of the Tianjin Binhai New District; [2] the Tianjin Binhai Mass Transit 

Development Co. Ltd.; and [3] the Huaxi sewage treatment plant and the Erqiao sewage treatment 

plant with a design capacity of 40,000m 3 per day in Guiyang City. 


Name: Tianjin Capital Environmental Protection Company 

Address: Chuangye Huanbao Building 76 Weijin South Road 

Nankai District, Tianjin, 300381 

Tel: +86-22-2393-0000 

Web: www.tjcep.com 

Ma Baiyu (Chairman) 

Gu Qifeng (President) 

An Pindong (Finance Director) 

333 


CHINA 


WUHAN SANZHEN INDUSTRY HOLDING CO LTD 

Wuhan Sanzhen Industry Holding Co., Ltd. (WSI) was founded in 1998 and is responsible for the 

abstraction, treatment and distribution of drinking water to the city of Wuhan and the surrounding area. 

25% of the company’s shares were floated in April 1998, 71% being held by the Wuhan Water 

Business Group Co. Ltd. 

Wuhan Sanzhen Industry Holding Co., Ltd., profit and loss account 

Y/E 31/12 (CNYmillion) 2003 2004 2005 2006 2007 

Water supply 159.4 N/A 158.8 153.1 153.2 

Drainage 0.0 N/A 11.0 10.7 11.9 

Turnover 159.4 169.1 169.9 290.1 238.7 


Net income 30.1 35.6 45.5 50.9 58.6 


WSI’s Zongguan and Baihezui waterworks supply water to 97% of the Hankou area. WSI is also 

involved in sewage treatment through the Wuhan Water Purification Plant, a 2-class sewage treatment 

plant. 


Name: Wuhan Sanzhen Industry Holding Co., Ltd. 

Address: 68 Tian Men Dun Road Jiang Han District 

Wuhan 430023, Hubei, China 

Tel: +86 27 8572 5739 

Fax: +86 27 8587 5730 

Web: www.600168.com.ch 

Chen Lqian (Chairman) 

Tu Lijun (President) 

Xu Hong (Finance Director) 

334 


CHINA 


CHINA WATER INDUSTRY INVESTMENT GROUP 

Xinjiang Changyuan Water Resources Industry Group Co Ltd (XCWR), a 60% owned subsidiary of 

China Water Industry Investment Corp (CWIIG), acquired a 60% interest in Kuerle Huitong Yinquan 

Water Co Ltd, a water utility company, from Xinjiang Huitong Co Ltd, for CNY78million in 2007. Kuerle 

Huitong Yinquan Water is engaged in the urban water supply for Korla, Xinjiang Uygur Autonomous 

Region. Korla has a population of 380,000, up from 40,000 in 1982. Xinjiang Huitong’s water revenues 

were CNY23.1million in 2005 and CNY27.6million in 2006, with part year revenues of CNY12.3million 

in 2007. 

China Water Industry Investment Corp. was founded in October 2004 as a national 

investment company focusing on investment, construction and operation of projects for urban water 

supply, sewage treatment and desalination. CWIIG is active across China, particularly including 

Shandong, Xinjiang, Zhejiang, Inner Mongolia, Jiangsu, Qingdao and Sichuan. In 2007, CWIIG’s daily 

water supply capacity was approximately 2.8million m 3 per day. 

In October 2007, China Water Affairs acquired 19.4% of China Water Industry Investment Corporation 

from Shanxi Wanjiazhai Yellow River Diversion Project General Company for CNY175million. 


Name: China Water Industry Investment Corp. 

Address: No 10 Nan Niange, Xuanwu District, Beijing 

Web: www.chinahho.com 

Liu Zhenghong (Vice General Manager) 

Ni Shiqiang (Manager, Investment Department) 

335 


CHINA 


XINJIANG CHANGYUAN WATER RESOURCES INDUSTRY GROUP CO LTD 

Xinjiang Changyuan Water Resources Industry Group Co Ltd (XCWR), a 60% owned subsidiary China 

Water Industry Investment Corp (CWIIG), acquired a 60% interest in Kuerle Huitong Yinquan Water 

Co Ltd, a water utility company, from Xinjiang Huitong Co Ltd, for CNY78 million in 2007. Kuerle 

Huitong Yinquan Water is engaged in the urban water supply for Korla, Xinjiang Uygur Autonomous 

Region. Korla has a population of 380,000, up from 40,000 in 1982. Xinjiang Huitong’s water revenues 

were CNY23.1 million in 2005 and CNY27.6 million in 2006, with part year revenues of CNY12.3 

million in 2007. 

China Water Industry Investment Corp. was founded in October 2004 as a national 

investment company focusing on investment, construction and operation of projects for urban water 

supply, sewage treatment and desalination. CWIIG is active across China, particularly including 

Shandong, Xinjiang, Zhejiang, Inner Mongolia, Jiangsu, Qingdao and Sichuan. In 2007, CWIIG’s daily 

water supply capacity was approximately 2.8 million m 3 per day. 

In October 2007, China Water Affairs acquired 19.4% of China Water Industry Investment Corporation 

from Shanxi Wanjiazhai Yellow River Diversion Project General Company for CNY 175million. 


Name: China Water Industry Investment Corp. 

Address: No 10 Nan Niange, Xuanwu District, Beijing 

Web: www.chinahho.com 

Liu Zhenghong (Vice General Manager) 

Ni Shiqiang (Manager, Investment Department) 

336 


CHINA 


XINJIANG URBAN CONSTRUCTION CO LTD 

Xinjiang Urban Construction (Group) Co., Ltd. is principally engaged in real estate operation, municipal 

infrastructure construction, the supply of source water and new construction materials. During 2007, 

the Company obtained approximately 51% and 35% of its total revenue from its real estate operation 

and municipal construction, respectively. 

Y/E 31/12 (CNYmillion) 2003 2004 2005 2006 2007 

Turnover - Water N/A N/A 61.3 59.6 53.5 

Turnover 405.9 385.9 453.3 558.1 792.4 


Net Profit 27.5 23.3 24.6 31.0 51.6 

EPS (CNY) 0.17 0.08 0.08 0.11 0.16 

In 2004 Xinjiang Urban Construction acquired the operational assets of water supply works in 

Shidunzishan from Urumqi Municipal Water Supply Company. These had an asset value of CNY216 

million at the time. 


Name: Xinjiang Urban Construction Co. Ltd. 

Address: Chengjian Building, No. 133 Nanhu South Road 

Urumqi, XNJ 830063, China 

Tel: +86 991 488 9813 

Fax: +86 991 488 9813 

Web: www.xjcj.com 

Liu Jun (Chairman) 

Ji Wei (President) 

Li Li (CAO) 

337 


INDIA 

PART 3(ii): COMPANY ANALYSIS: LOCAL/REGIONAL PLAYERS 

INDIA 

BHEL 

BHEL (Bharat Heavy Electricals Limited) is the largest related energy and infrastructure sectorengineering 

and manufacturing enterprise in India. It is 67% held by the Indian Government. Activities 

include manufacturing water testing systems and desalination plants. BHEL’s Industrial Systems 

Group (ISG) has been seeking to develop private sector operations in water and wastewater 

treatment projects, which has been identified by the company as one of the principal areas for growth 

between 2002 and 2007. As part of this, the company has developed its ability to provide systems 

and services for water management systems including potable water pumping stations, desalination 

plants, water treatment plants and sewage and effluent treatment plants. 

In 2003, BHEL commissioned three potable water pumping stations in the vicinity of Bangalore, 

providing 0.27million m 3 of water per day. The fully automated project has been set up by ISG for the 

Bangalore Water Supply and Sewerage Board, under the Cauvery Water Supply Scheme Stage IV. 

This project has entered a three year O&M period. 

In September 2003, BHEL gained a wastewater treatment construction and operations contract in 

Chennai. The INR364million (USD7.9million) contract was awarded by the Chennai Metropolitan 

Water Supply and Sewerage Board (CMWSSB). The order envisages design, engineering, supply, 

installation and commissioning of mechanical and electrical equipment, besides automation and 

complete civil works of a 40,000m 3 per day sewage treatment plant at Nalsapakkam, Chennai. The 

facility entered service in 2005, when BHEL will take over the plant’s Operation and Maintenance for 

ten years. The sewage treatment plant will have its own power plant which will be run by biogas, 

generated within the facility, making it self-sufficient and lowering operating costs. 

BHEL, profit and loss account 

Y/E 31/03 (INRmillion) 2003 2004 2005 2006 2007 

Revenues 79,546 86,625 103,364 145,873 188,385 


Pre-tax profit 8,024 10,148 15,816 26,544 37,361 

Net profit 4,445 6,582 9,534 16,792 24,147 

EPS (R) 


Name: BHEL 

Address: BHEL House, Siri Fort, 

New Delhi - 110049, India. 

Tel: +91 11 26001010 

Fax: +91 11 26493021 

Web: 

www.bhel.com 

Shri K Ravi Kumar (Chairman & Managing Director) 

Shri C S Verma (Finance Director) 

338 


INDIA 

IVRCL CONSTRUCTION AND PROJECTS LTD 


IVRCL Constructions & Projects Ltd (IVRCL) has developed a policy of moving its construction 

activities from civil engineering to lump sum turnkey projects, to design and execution projects and in 

three cases BO/BOT concessions: The Alandur WWTW; the Tirupur MSW facility and the athletes’ 

village for the December 2002 National Games in Hyderabad. 

IVRCL Constructions & Projects Ltd, profit and loss account 

FY 31/03 (INRmillion) 2004 2005 2006 2007 2008 

Net sales 7,735 10,450 15,014 23,465 36,981 

Operating profit 559 809 1,290 2,392 3,660 

Interest -121 -214 -253 -325 -478 

Profit before tax 340 595 1,037 1,851 2,853 

Extraordinary items 88 0 0 0 0 

Tax paid 35 26 108 436 748 

Net profit 392 567 930 1,415 2,015 

ESP (Rs) N/A N/A 8.8 12.4 16.1 

The company’s regional structure was changed into a divisional structure in 2001. Currently water 

systems and pipelines account for 61% of orders as of May 2008 against 30% in 1998. The total order 

backlog at the time was INR122billion, of which INR76billion related to water and waste management 

projects. 53% of revenues in 2005-08 were from water and waste management projects. 

The company gained the first BO for wastewater in India: First STP Private Ltd (95%): JV with 

VA Tech Wabag Ltd (Balcke Duo & Wabag Technologies Ltd), a subsidiary of Austria's VA Tech AG. 

Then developing a 12 Ml/day (4.4million m 3 pa) WWTW at Perungudi for Alandur Municipality, where 

IVRCL has installed the underground sewerage system. 25,162 households have been connected to 

the system. 

In 2005, the company’s Chennai Water Desalination Ltd was awarded India’s first desalination 

contract, a DBOOT worth INR4.9billion for a 100,000m 3 per day facility at Minjure, Chennai in Tamil 

Nadu. This is a joint venture with Spain’s Befesa: 75% IVRCL, 25% Befesa. In June 2008, the project 

was 67% complete and is expected to enter service in January 2009. 

IVRCL also has a 114km bulk water provision construction project for supplying water from the Ongur 

river to Chennai, which contains a five year O&M component. 


Name: IVRCL Constructions & Projects Ltd 

Address: M-22/3RT, Vijayanagar Colony , 

Hyderabad, Andhra Pradesh 500 057 India 

Tel: 040 334 3678 

Fax: 040 334 5004 

Web: www.ivrcl.com 

E. Sudhir Reddy (Chairman and MD) 

R. Balarami Reddy (Finance Director) 

339 


INDIA 

JUSCO 


Jamshedpur Utilities and Services Company Limited (JUSCO) is 100% held by Tata Steel. It was 

formed in August 2004 and incorporated in April 2004 for improving the management of utility 

operations in the Tata Steel developed town of Jamshedpur and for leveraging this experience into 

other Indian markets. As Tata Steel’s Town Division, JUSCO has managed municipal services in 

Jamshedpur since Tata Steel’s foundation in 1907 and currently serves an area of 94Km with a 

population of 700,000, with a continuous water supply for 500,000 people. Since 2007, JUSCO has 

gained a series of O&M and concession contracts in India as well as a series of design and build and 

management contracts in Madhya Pradesh. 

JUSCO, profit & loss account 

Y/E 31/03 (INRmillion) 2007 2008 

Water services N/A 1,214.2 

Total revenues 2,198.9 2,722.7 

Operating profit 191.9 302.4 

Pre-tax profit 185.0 284.5 

Post-tax profit 111.1 177.4 

JUSCO, service delivery in Jamshedpur 

Y/E 31/03 2004 2005 2006 2007 2008 

Network coverage 66.0% 67.0% 72.1% 73.8% 78.0% 

Partnership connections 0 613 4,181 5,789 9,585 

Bacteriological compliance N/A 93.0% 96.0% 98.5% 100.0% 

Non-revenue water N/A 33.0% 16.8% 13.9% 11.5% 

Failures in water system N/A 44 34 14 3 

Energy consumption (Kwh per Ml) N/A 332 319 309 283 

JUSCO, concessions & O&M contracts 

2008 Haldia 25 year BOT 250,000, water 

The West Bengal city’s 113,500m 3 per day water treatment works are to be managed for 25 years, 

along with the construction and subsequent management for 25 years of a new 113,500m 3 per day 

water treatment works. Other work includes billing and bill collection and management of the 

distribution system. The contract has been awarded to JUSCO, with Ranhill (Malaysia) and IDFC 

(India). The facility will cost INR10billion to construct and concession fees of INR12billion will be 

payable to the Haldia Development Authority. 

2007 Jamshedpur 4 year O&M 50,000, water 

An O&M contract covering the Tata Motor’s township’s 22,700m 3 per day water treatment works, and 

the distribution system, which serves 8,000 domestic connections. 

2007 Kolkata 30 year BOT 30,000, water & wastewater 

A BOT for a 13,600m 3 per day water distribution network and an 8,300m 3 per day sewage treatment 

work are being developed by JUSCO and Voltas (India) for the Naba Diganta Industrial Township, 

Sector V, Salt Lake in Kolkata. 


Name: Jamshedpur Utilities & Services Company Limited (JUSCO) 

Address: Sakchi Boulevard Road, Northern Town, 

Bistupur, Jamshedpur - 831001 

Tel: 91 657 2431914 

Fax: 91 657 2424219 

Web: www.juscoltd.com 

Arun Narayan Singh (Chairman) 

Sanjiv Paul (MD) 

G S Basu (General Manager, Water Management) 

340 


INDIA 

LARSEN & TOUBRO 


Larsen & Toubro (L&T) specialises in construction and heavy engineering projects. The Power and 

Transmission division has been involved in water and wastewater construction projects for some 

years. A typical project being water treatment works for the Hubli-Dharwar Urban Water Supply 

Scheme in Karnataka. Contracts gained during 2004-05 included: Providing and laying of pipeline from 

Modhera to Dharoi as part of a lift irrigation project at Mehsana, Gujarat for Gujarat Water Resources 

Development Corporation Limited (INR2,530million) and providing water supply system to Bangalore 

under the Greater Bangalore Water Supply Project for Bangalore Water Supply and Sewerage Board 

(INR1,658million). 

The first BOT contract gained by L&T is in Andhra Pradesh; the Visakhapatnam Industrial Water 

Supply Project. This is a 55.5km pipeline from the River Godavari to augment the 153km Yeleru Left 

Bank Canal. Some 15% of the output is going to domestic consumers. Larsen & Toubro has a 32 year 

concession for operating the pipeline, which started in December 2004, with equity financing from the 

municipality (Andhra Pradesh Industrial Infrastructure Corporation) and from the private sector; L&T 

Holdings and PSL Holdings, with a permitted return of 15% over the concession. 

Larsen & Toubro, profit & loss account 

Y/E 31/03 (INRmillion) 2004 2005 2006 2007 2008 

Revenues 98,068 132,550 149,660 179,010 251,870 

Operating profit 8,899 14,339 15,730 22,090 34,050 

Pre-tax profit 7,688 9,330 12,350 19,820 30,680 

Net profit 5,327 9,838 10,121 14,030 21,730 

EPS (INR) 21.41 38.81 38.03 50.22 75.59 


Name: Larsen & Toubro 

Address: L&T House, Ballard Estate, Mumbai 400 001, India 

Tel: +91 22 2268 5656 

Fax: +91 22 2268 5858 

Web: www.laINRentoubro.com 

A M Naik (Chairman & Managing Director) 

Y M Deosthalee (Finance Director) 

K Venkataramanan (President, Engineering & Construction Projects) 

341 


JAPAN 


JAPAN 

MITSUI 

After the aborted attempt by Mitsubishi to acquire Berlinwasser International, Mitsui is the only 

Japanese company to have developed an international presence in the water outsourcing market. In 

March 2006, Mitsui acquired 35% in Thai Tap (see Company entry) in Thailand. The company 

subsequently acquired 85% of Earth Tech’s Mexican activities from Aecom in 2008. 

Mitsui, profit & loss account 

Y/E 31/03 (JPYbillion) 2004 2005 2006 2007 2008 

Revenues 2,980 3,526 4,116 4,991 5,740 

Pre-tax profit 87 176 253 330 402 

Net profit 68 121 202 302 410 

EPS (INR) 43 77 114 174 227 

In June 2001, Earth Tech acquired Atlatec S.A. de C.V. (Atlatec), the Environmental Division of Cydsa. 

S.A. de C.V. Atlatec specialises in the provision of water and wastewater treatment services to the 

refinery industry and is moving into the water distribution market. Concessions include wastewater 

treatment facilities for Pemex refineries located in Cd. Madero, Tula, Cadereyta and Minatitlán. 

2004 Chihuahua 20 year DBFO 250,000, wastewater 

The original project was awarded to Atlatec in 1994. It serves the northern region the city and treats 

5million gallons of wastewater per day. Earth Tech has operated the plant since 1995. The client is the 

Junta Municipal de Agua y Saneamiento de Chihuahua. 

2004 Chihuahua 10 year DBFO 500,000, wastewater 

The second facility has been located in the southern region of the city and it treats more than 50million 

gallons of wastewater per day having entered service in 2006. The two facilities will account for the 

entire city’s wastewater. 

2002 Orizaba 20 year DBFO 117,000 water & sewerage 

In September 2002, the company gained a USD15.5million DBO for a wastewater treatment plant in 

Orizaba by Fideicomiso del Sistema de Aguas Residuales del Alto Rio Blanco (FIRIOB), a local 

industrial grouping. The system will treat 80,000m³ of wastewater daily with a biochemical oxygen 

demand of 109.9tons per day. The facility will treat wastewater from Orizaba, as well as wastewater 

from a brewery, a paper mill and 12 other industries. Work is scheduled for completion in August 2004. 

70% of the finance comes from FIRIOB and 30% from municipal sources. 

2003 Xalapa 20 year DBFO 400,000 water & sewerage 

A USD55million DBFO water and wastewater contract for the town of Xalapa was awarded to ET’s 

Aguas Tratadas de Xalapa, including increasing the connection rate to these services from 50% to 

100%. Works will include a 65,000m 3 per day water treatment plant due to enter service in 2005. Base 

revenues from 2005 will be USD7.0million pa. 


Name: Mitsui & Co Ltd 

Address: 2-1 Ohtemachi 1-chome, Chiyoda-ku, Tokyo 100-0004 Japan 

Tel: 81-3-3285-1111 

Fax: 81-3-3285-9819 

Web: www.mitsui.co.jp 

Nobudo Ohashi (Chairman) 

Shoei Utsuda (President & CEO) 

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MALAYSIA 

EMS ENERGY LTD 

Eco Water was renamed EMS Energy in October 2007. As a result, the company’s core activities now 

relate to the regional market for oil, marine and gas equipment and services. 

Eco Water (EW) provides sewage and effluent treatment systems and services for municipal and 

industrial customers, with all of 2005 revenues being accounted for by these services. The company 

was founded in 1995 to provide wastewater treatment services to the Malaysian rubber industry. 

Almost all activities continue to be in Malaysia, which accounted for 98% of turnover in 2005. Currently 

activities are mainly based in southern Malaysia. China has been identified as the principal target 

market. The company was floated on the Singapore exchange in 2003. 

Revenues (mainly water related) from Eco Water Technologies (M) in Malaysia fell from 

USD11.6million in 2005 to USD5.3million in 2007. The Eco Water activities were renamed Sewage 

treatment services (STS) and Industrial wastewater treatment services (IWTS). 

EMS, profit and loss 

FY 31/12 (USDmillion) 2003 2004 2005 2006 2007 

STS (Sewage treatment systems) 15.09 14.70 10.14 8.55 4.12 

IWTS (Industrial effluent systems) 2.68 0.00 1.69 6.73 2.54 

Water treatment systems 0.17 0.00 0.00 0.00 0.00 

FEES (Energy) 0.00 0.00 0.00 0.91 24.38 

Turnover 17.94 14.70 11.83 16.19 31.04 

Pre-tax profit 3.17 -0.54 -4.79 -4.25 -0.45 

Net profit 2.35 -0.93 -3.82 -4.34 -1.29 

Earnings per share ([S]USD) 2.64 -0.92 -3.71 -4.09 -1.07 

Industrial customers vary year by year due to the relatively short-term nature of contracts. The main 

customer is the Ramatex Berhad Group, which accounted for 13.5% of 2000 turnover and 3.3% in 

2002 including EW’s activities in Namibia. In all, 17 industrial customers have accounted for 5% or 

more of group turnover in any one year between 2000 and 2002. 

In June 2004, Eco Water entered into a joint venture with China Yunnan Lanping TL Hydraulic Power 

Co., Ltd to incorporate a joint venture company in Yunnan (Yunnan Tian Long Eco Water Hydro 

Investment Co., Ltd) to seek business in water & wastewater treatment and environmental related 

projects and energy such as hydro power. Eco Water is initially subscribing MYR6million to the JV, 

which will have a registered capital of MYR86million, mainly accounted for by debt finance. Currently, 

the project is awaiting local approval before construction can commence. 


Name: EMS Energy 

Address: 10 Tuas Avenue 11 

Singapore 639076 

Tel: +65 6861 2722 

Fax: +65 6861 5655 

Web: www.emsenergy.com.sg 

Ting Teck Jin (Chairman & CEO) 

Tan Joo Chai (MD) 

Tan Siew Hee (Group Finance Manager) 

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MALAYSA 


GOLDIS 

Goldis is a holding company for a group of private equity projects ranging from property development 

to organic fish farming. The company was founded in 2000 as a merger of two holding companies and 

floated on the KLSE in May 2002. Crest Spring Pte Ltd is a subsidiary of Gold China Sdn Bhd, which 

is a subsidiary of Goldis Berhad and is the holding company for its Chinese water and wastewater 

treatment operations. The company believed that it could gain six or seven water contracts by early 

2007 and aims to serve 4million households in China. To date, three or four contracts are under 

development, two of which have entered into service. Goldis is also seeking contracts in Thailand, 

Indonesia and Abu Dhabi. 

Goldis Bhd, profit & loss account 

Y/E 31/01 (MYRmillion) 2004 2005 2006 2007 2008 

Turnover – Water N/A N/A N/A 3.0 2.7 


Pre-tax profits 81.4 48.2 34.5 65.4 31.9 

Net profits 60.9 44.4 31.7 64.7 32.2 

Earnings per share (MYR) 0.19 0.14 0.10 0.21 0.10 

MYR81.6million was invested in Chinese projects in 2008. Gold China revenues were MYR68.7million 

in 2007 and MYR71.4million in 2008, with pre-tax profits falling from MYR1.4million to MYR0.6million. 

To date, three contract gains have been identified, covering approximately 500,000 people. In June 

2005, Goldwater gained a contract with Tie Ling City (Liaoning Province) for a 100,000m 3 per day 

sewage treatment plant and a linked 50,000m 3 per day water treatment and recovery plant. The 

construction work will cost MYR75million, with the cost of the concession contract being 

MYR125million. 

In March 2006, Goldis via its 81% held subsidiary Jiangsu Gold Water & Co. Ltd acquired 77.5% of 

Ganyu Xin Cheng Sewage Treatment Co Ltd for MYR7.75million (MYR3.62million). This covers two 

contracts: 

1. a 20 year operating concession for a sewage treatment plant in DaJiJia, Western District of Yantai 

Economic and Technical Development Zone, Yantai, Shandong Province; 

2. a 20 year concession for a 20,000m 3 per day sewage treatment plant in Ganyu County, 

Lianyungang City, Jiangsu Province. Construction is anticipated to take 2-3 years. 

The Ganyu (Jiangsu Province) BOT entered service in 2007 and the Dajijia (Shandong Province) BOT 

entered service in 2008. 


Name: Goldis Bhd 

Address: Penthouse, Menara Tan & Tan, 207 Jalan 

Tun Razak, 50400 Kuala Lumpur, Malaysia 

Tel: 603-2163 1111 

Fax: 603-2163 7020 

Web: www.goldis.com.my 

Tan Lei Cheng (Chairman & Chief Executive Officer, Goldis) 

Mickey Ng Koon Yee (Chairman, Gold Water) 

Gary How Kim Kong (Chief Financial Officer, Gold Water) 

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INTAN UTILITIES BERHAD 

Intan Utilities Berhad’s (IU) 46.19% - held associate company Jauhari Harapan Sdn Bhd (JHSB) owns 

Metropolitan Utilities Sdn Bhd (MUC) and Air Utara Indah Sdn Bhd (AUI). In 1989, MUC gained a 20 

year concession for bulk water provision, treatment and supply to Lembaga Air Perak, the state 

government of Perak’s water authority. Under the concession, MUC supplies water to Ipoh, the state 

capital, and the regions of Ulu Kinta, Sungai Tarap and Tanjung Talang. In 1996, the concession was 

extended to 2024. IU was founded in 1995 and floated on the Kuala Lumpur Stock Exchange in July 

1997. In June 1998, Veolia Water Asia Pacific Pte Ltd (VWAP) acquired 26% of IUB to become its 

largest individual shareholder. This share was subsequently increased to 30%. In January 2003, IUB 

sold 30% of the share capital of MUC to VWAP for MYR36million, with VWAP selling back its 30% 

stake to IUB and its other major shareholders. 

Vista Meranti Sdn Bhd, a wholly-owned unit of HQZ Credit Sdn Bhd, raised its interest in Intan Utilities 

from 57.7% to 98.70% in January 2007 and delisted the company. 

Intan Utilities, profit and loss account 

Y/E 31/12 (MYRmillion) 2003 2004 2005 

Water provision 48.0 48.2 8.1 

Group turnover 78.7 100.2 829.0 

Operating profit 12.0 20.1 25.0 

Net income 6.4 11.8 18.2 

Earnings per share (MYR) 0.17 0.12 0.19 

The concession serves 600,000 people. Profits for the water activities in 2002 were MYR25.2million, 

falling to MYR16.4million in 2003. The fall in revenues and profits reflects the end of the construction 

contract for a new pipeline serving the state. During 2004, revenues and margins have stabilised. 

Following VWAP’s stake acquisitions, VWAP’s CGE Utilities has taken over the operation of the 

concession, while IUB continues to own the concession itself. 

The company announced that in 2006 it is seeking to divest its water interests to concentrate on 

developing its retail activities. These have been deconsolidated in 2005 as an associate company. 

JHSB generated revenues of MYR112.2million in 2005 and a pre-tax profit of MYR18.4million. 


Name: Intan Utilities Berhad 

Address: Level 13 (East Wing), Berjaya Times Square, No 1 Jalan Imbi, 

55100 Kuala Lumpur, Malaysia 

Tel: +60-3-2935-8888 

Fax: +60-3-2935-8043 

Web: www.intan.com.my (currently ‘under construction’) 

Freddie Pang Hock Cheng (Chairman) 

Low Ah Ha (Director) 

Su Swee Hong (Corporate Secretary) 

Wong Pooi Cheong (Corporate Secretary) 


Name: HQZ Credit Sdn. Berhad 

Address: Level 12 (East Wing), Berjaya Times Square, No 1 Jalan Imbi, 


Tel: +60-3-2148-1009 

345 


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KUMPULAN PERANGSANG SELANGOR BERHAD 

Kumpulan Perangsang Selangor Berhad (KPS) was incorporated in 1975 as part of the state of 

Selangor’s Kumpulan Darul Ehsan Berhad (KDEB). KDEB is designed to encourage private sector 

investment and participation in developing the state’s infrastructure and services. After a partial 

divestment from KDEB, KPS was listed on the Kuala Lumpur Stock Exchange on 22 July 2003 and 

remains 60.2% held by KDEB. In recent years, the company has concentrated upon property 

development, highways and water concessions. 

Principal water service company holdings, 2008 

Syarikat Pengeluar Air Selangor Holdings Berhad (SYBAS) 30% 

Perangsang Water Management Sdn Bhd 40% 

Konsortium ABASS Sdn Bhd 55% 

Syarikat Pengeluar Air Selangor Holdings Bhd, (SPLASH) 30% 

Taliworks Corporation Berhad (see Company entry) 20% 

SYBAS started in January 2005, distributing water to 6million people and industrial and commercial 

clients in the Klang Valley. Puncak Niaga holds the other 70% (see Company Entry). A controlling 

55% stake in ABASS was acquired in April 2006. 

In July 2003, Selangor awarded KPS a MYR2.5billion water treatment project under the Langat Two 

Water Scheme. This involves the transfer and treatment of water from Pahang state to Selangor in 

four equal stages of 545,000m 3 per day, pending ratification from the Federal Government. It is 

anticipated that Puncak Niaga (see separate entry) will take a significant stake in the project. 

Selangor’s proposed consolidation 

The Selangor Government is seeking to consolidate the various concessions under KDEB from 2009. 

This is in part due to the forthcoming 37% tariff increase in 2009 by SYABAS under its concession 

agreement. This will involve KDEB buying out the various stakes in these concessions that it does not 

currently hold at a cost in the region of MYR12billion. 

FY 31/12 (MYRmillion) 2003 2004 2005 2006 2007 

Sales – Infrastructure & Utilities N/A N/A N/A 62.1 134.1 

Net sales 237.6 236.2 308.9 378.6 425.6 

Operating income 38.4 -43.9 -12.0 43.5 91.9 

Infrastructure & utilities profit 59.0 N/A N/A N/A N/A 

Pre-tax profit 107.0 -20.1 -123.2 18.2 36.1 

Net income 57.0 23.5 -48.8 18.8 32.0 

Earnings per share (Sen) 14 5 -11 4 7 

Indonesia 

In August 2003, KDEB signed a memorandum of understanding with Indonesia’s PT Pengembangan 

Investasi Riau in Sumatra. KDEB and Malaysia’s Putera Capital Bhd entered an understanding with 

PT Pengembangan Investasi Riau to provide a water supply from the Rokan River to Dumai village in 

a project worth MYR280million. 


Name: Kumpulan Perangsang Selangor Berhad 

Address: 16th Floor, Plaza Perangsang, 

Persiaran Perbandaran, 40000 Shah Alam 

Tel: 603-5510 3999 

Fax: 603-5510 9977 

Web: www.kps.com.my 

YBhg Dato' Haji Abd, Karim bin Munisar (Executive Chairman) 

YBhg Datin Paduka Juma'ah Binti Moktar (Managing Director) 

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PBA HOLDINGS BHD 

Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBA), a subsidiary of PBA Holdings BHD, is a water 

supply company operating in raw water abstraction, water treatment and supply. In 1999 the Penang 

Water Authority was corporatised as PBA. PBA operates a 30 year water concession in Northern 

Penang, Malaysia. The company was floated on the Kuala Lumpur Stock Exchange in April 2002, 

when 45% of PBA’s equity was sold by the state Government, raising MYR194million (USD51million). 

The state has six dams with a total water storage capacity of 46million m 3 . Currently, PBA has a total 

design capacity to supply about 1.17million m 3 of treated water per day from its 10 treatment plants to 

meet the average supply demand of 0.819million m 3 and consumption of 0.660million m 3 . The network 

is in relatively good order, with non revenue water falling from 19.4% in 2003 to 16.9% in 2007, 

compared with the national average of 38.9%. Water revenues rose from MYR153.7million in 2005 to 

MYR162.6million in 2006. Water consumption grew from 195.8million m 3 in 1999 to 262.5million m 3 in 

2007. A tariff review has been under consideration since 2005, as operating costs rose by 39% 

between 2000 and 2005 and have not been increased since 2001. There were 461,327 customers at 

the end of 2007, 405,235 domestic and 56,092 trade customers, serving a population of 1.52million. 

There were 338,523 customers in 1999. 

Perbadanan Bekalan Air Pulau Pinang Sdn Bhd, profit and loss account 

Y/E 31/12 (MYRmillion) 2003 2004 2005 2006 2007 

Sales 149.0 153.7 162.3 171.8 181.2 

Profit before tax 51.1 49.6 42.5 43.8 51.6 

Net income 40.6 39.8 37.5 32.9 42.6 

Earnings per share (Sen) 12.3 12.0 9.9 9.9 12.9 

China 

2003 Yi Chun City 30 year BOT 250,000 water 

The BOT was awarded to PBA’s Pinang Water Ltd. PWL is 26% held by PBA, along with the Ranhill 

Utilities (37%) and YLI Holdings Bhd (37%). Yi Chun is in Jiangxi Province, near Shanghai. The 

project involves the construction of a 100,000m 3 per day water treatment plant in two equal phases, 

the first entering service delivering an initial 5,000m 3 per day in 2006 and the second phase during 

2008. The project is forecast to generate revenues of MYR243million with an initial investment of 

MYR12million. 


Name: Perbadanan Bekalan Air Pulau Pinang Sdn Bhd 

Address: 32/F Komtar, 10000 Penang, Malaysia. 

Tel: +60-4-263-4200 

Fax: +60-4-261-3581 

Web: www.pba.com.my 

Y.A.B. Lim Guan Eng (Chairman) 

Ir. Jaseni Bin Maidinsa (CEO) 

Ang Weng Joo (CFO) 

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PPB GROUP BERHAD 

PPB Group Berhad was founded in 1968. It is a conglomerate active in sugar refining, flour and feed 

milling, edible oils processing, oil palm cultivation, film exhibition and distribution, property 

development, shipping and waste management. Utilities and environmental engineering activities are 

undertaken by its 55% held subsidiary Chemquest Sdn Bhd. Chemical Waste Management Sdn Bhd 

(CWM) is owned held by Chemquest. CWM has been developed for design and build water and 

wastewater treatment projects in Malaysia, with six such projects worth MYR259million being carried 

out between 2005 and 2006. Flood mitigation projects and water and sewage treatment works 

engineering projects in Malaysia generated revenues of MYR258million in 2007. 

In October 2005, Chemical Waste Management Sdn Bhd sold its 25% equity interest in Konsortium 

Abass Sdn Bhd for a total cash consideration of MYR132.0million. Konsortium Abass has a 30-year 

concession with the Selangor State Government to undertake the operation and maintenance of the 

existing facilities of the Sungai Semenyih Water Supply Scheme. See Company Entry on KPS. 

PPB Group Berhad, profit and loss account 

FY 31/12 (MYRmillion) 2003 2004 2005 2006 2007 

Sales – Environmental Eng 70.9 102.2 95.3 

Net sales 9,319.8 10,999.7 10,688.0 2,590.5 2,989.4 


Net income 371.3 400.7 394.6 560.7 6,973.0 


China 

Through the Beijing Kerry Veolia Waste Water Treatment Co (51% held by Chemquest) PPB is 

leading a consortium to run the MYR201million Lugouqiao Sewage Treatment Plant (Phase I) project 

in Fengtai District, Beijing. The contract was awarded in July 2003. KUL holds 51% of Beijing Kerry 

Veolia Waste Water Treatment Company (BKV) with Veolia Environnement. Kerry Utilities is 

subscribing MYR21.4million to BKV, which funded the construction of the sewage treatment plant with 

a treatment capacity of 100,000m 3 per day for the 2008 Beijing Olympiad. The consortium raised 

MYR85million for the project while the BWDG funded the MYR116million balance with loans from the 

World Bank. A 20 year operating concession started in July 2004 and will generate total revenue in 

excess of MYR1billion over the concession period. This is the first international WWTW BOT in 

Beijing. 

PPB is also involved with Veolia’s Hohhot water treatment contract in Inner Mongolia. 


Name: PPB Group Berhad 

Address: Wisma Jerneh, 38 Jalan Sultan Ismail, 


Tel: 603 2141 2077 

Fax: 603 2141 8242 

Web: www.ppbgroup.com 

www.chemquest.com 

Datuk Ong Nam Siew (Chairman) 

Dato’ Lim Chee Wah (Deputy Chairman) 

Tan Gee Sooi (Managing Director) 

Leong Chy Ying (CFO) 

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PUNCAK NIAGA BERHAD 

Puncak Niaga (PN) was incorporated in January 1997 and listed on the Kuala Lumpur Stock 

Exchange in July 1997. PN is the holding company for Puncak Niaga (M) Sdn Bhd (PNSB), which was 

incorporated in 1989 and gained the water treatment operation and management contract for facilities 

responsible for 70% of water supplied to the state of Selangor and the Federal Territory of Kuala 

Lumpur in 1994. A second contract, for expanding the state’s water treatment capacity was awarded in 

1997. The population of Selangor and Kuala Lumpur is projected to grow from 5.37million in 2000 to 

7.94million by 2010. Demand is forecast to rise from 3,088Ml/day in 2000 to 5,382Ml/day by 2010. 

The first privatisation/concession agreement was signed in September 1994 for the operation of 

27 working WTPs. The second concession, signed in March 1995, is for a construction come 

operation agreement for the 950Ml/day Sungai Selangor Water Supply Phase 2 Project (SSP2) 

treatment plant. Two further agreements cover two additional water treatment plans. In 2007, total 

treatment capacity was 1,930Ml per day. The concessions are due to expire at the end of 2020. 33.9% 

of PN’s equity is held by Central Plus (M) Sdn Bhd and 2.9% by Corporate Line (M) Sdn Bhd, the 

original investors in PNSB. In 2005, PN took over from Veolia as the operator of the water treatment 

works. 

Non revenue water was 33.0% in 2007, down from 42.8% in 1994, but still short of the 15% target for 

2015. After the replacement of 202,420 meteoric 2007, no water meters are more than seven years 

old. During 2007, PN spent MYR400million replacing 500km of water pipes. The company had 

previously replaced 336km of its 5,600km network. 

It is understood that PN is looking at ways of managing Indah Water Konsortium, the renationalised 

national sewerage and sewage treatment company. The State of Selangor is considering acquiring all 

water assets in the state. Bids of USD1.8-3.7billion were mentioned in the press during 2008. 

Puncak Niaga, profit and loss account 

Y/E 31/12 (MYRmillion) 2003 2004 2005 2006 2007 

Turnover – Water N/A N/A 1,071.1 1,265.9 1,333.1 

Turnover 578.3 566.8 1,144.9 1,428.1 1,389.8 

Pre-tax profit 183.4 77.1 196.8 367.3 115.4 

Net income 129.6 46.4 99.3 331.6 97.6 

Earnings per share (MYR) N/A 0.15 0.31 1.45 0.24 

The main project has been the development of the SSP2 water treatment plant. Stage 1 was 

completed in 2000 with a capacity of 475million L per day. Stage 2, costing MYR533.9million, entered 

service in 2001 and supplies a number of towns and parts of Kuala Lumpur. It also has a daily 

production capacity of 475million L. Delivery in 2003 was 897.5million L per day. PNSB is involved in 

the financing, design, construction, operations, maintenance and management of SSP2. PNSB now 

produces 1,926million L of water per day. It is likely that a third construction phase will be required by 

2010. 

In December 2004 PN’s 70% held subsidiary Syarikat Bekalan Air Selangor Sdn Bhd (SYABAS) was 

awarded a 30 year concession for operating the water supply services in the state of Selangor and the 

Federal Territories of Kuala Lumpur and Putrajaya by the Federal Government. It is understood that 

MYR2billion will be needed to replace 6,000km of supply pipes. The concession started in January 

2005 and covers 7.1million people via 1.48million customer connections, rising to 7.3million people 

and 1.522million domestic and business connections in 2007. 

SYBAS plans a total spending of MYR110billion during the 30-year water concession period in Kuala 

Lumpur, Selangor and Putrajaya. This will include MYR10.7billion for capital expenditure, including 

development and upgrading of its distribution system (MYR4.8billion); asset management and 

replacement (MYR2.1billion); non-revenue water (NRW) reduction programme including pipe 

replacement (MYR2.7billion); and provision for land matters (MYR1.1billion). 

International developments 

PN has opened affiliated offices in Brunei, Philippines, Indonesia and Cambodia with the longer term 

aim of entering these markets on a JV basis. In November 2002, PN gained a MYR234million contract 

PUNCAK NIAGA BERHAD 

349 


MALAYSA 


to lay a 1,124km water pipeline to Chennai in India which entered service in 2004 and involves a five 

year management contract. 

In May 2008, Sino Water, a joint venture between PN (80%) and Environmental Holding (20%) of 

Singapore was formed. Subsequently, Sino Water acquired 83% of Luwei (Pingdingshan) Water 

based in Lushan, Henan Province in August 2008 and Xinnuo Water (Binzhou) Limited, a company 

based in Yangxin County, Shandong Province in July 2008. 


Name: Puncak Niaga Berhad 

Address: 1401-06, 14 th Floor, Plaza See Hoy Chan, 

Jalan Raja Chulan, 50200 Kuala Lumpur, Malaysia. 

Tel: +(60) 3 201 8648 

Fax: +(60) 3 201 8658 

Web: www.puncakniaga.com.my 

Y Bhg Dato Rozali bin Ismail (Chairman) 

Lee Miang Koi (Director, Business Development) 

Tan Seng Lee (Director, Finance) 

Ruslan bin Hassan (Vice Chairman) 

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MALAYSA 


RANHILL BHD 

Ranhill Bhd bought back its Ranhill Utilities Bhd subsidiary in October 2004. SAJ Holding Sdn Bhd 

(SAJH), the state of Johor Water Company was set up to operate the state’s water supply services in 

1994. In 2000, SAJH was awarded a 30 year concession to operate these services. SAJH was then 

reversed into Ranhill Holdings, which was in turn 60% held by Ranhill. After the reconsolidation, 

Ranhill Water Services was incorporated in March 2005 to cover Ranhill’s water operations. In 2007, 

2% of revenues came from the water activities in Thailand and China. This is expected to rise to 25% 

by 2010. 

Ranhill Utilities Bhd, profit and loss account 

FY 31/12 (MYRmillion) 2003 2004 2005 2006 1 2007 2 

Water sales 0.0 0.0 359.9 732.4 533.3 

Net sales 423.6 490.3 531.9 818.5 638.4 


Pre-tax profit 134.5 121.8 152.5 254.7 242.3 

Net income 94.5 79.4 116.0 189.3 206.2 


2006 and 2007 have a 30 th June year end 

[1] 

For 18 months 

[2] 

For 12 months 

SAJH has 43 water treatment plants and a 9,000km distribution network. Water provided meets WHO 

and Ministry of Health standards, and distribution losses are planned to fall to 20% as part of a 2000- 

2003 infrastructure investment plan costing MYR680million. The MYR650million Semangar water 

supply scheme is to be operational in 2003. The 2004-08 capital spending plan is for MYR999million. 

Long term plans include expanding water consumption from 1,163 Ml/day in 2000 to 1,764 Ml/day by 

2010. SAJH serves 3.4million people in 2005 and had 850,000 domestic, industrial and institutional 

customers at the end of 2007 compared with 787,894 in 2005. Non-revenue water was 32.5% in 2006 

and 31.5% in 2007, with the aim of reducing this to 20% by 2010. 

FY 31/12 (MYRmillion) 2004 2005 2006 2007 

Water sales 443 470 508 534 

Water consumption (m m 3 ) 297 309 318 334 

Domestic customers 681,011 702,781 723,286 746,952 

Non domestic customers 92,245 95,637 98,579 103,774 

China 

Operations in China and Thailand are carried out through Ranhill’s 70% owned Ranhill KWI (RKWI). In 

July 2003, RKWI gained a 30 year BOT to build and operate a 100,000m³ per day water treatment 

plant for Yichun City in Xiangji Province, China in two equal phases. RKWI holds 26% of the operating 

company, which will invest MYR37million into the project. RKWI gained two 30,000m 3 /day wastewater 

treatment BOT contracts in 2007; one serving the Hefei Chemical Industry Park and the other serving 

Xiao Lan. 

2003 Yichun City 30 year BOT 125,000, water treatment 

2007 Xiao Lan 29 year BOT 30,000m 3 /day wastewater 

2007 Hefei 25 year BOT 30,000m 3 /day wastewater 

PN acquired Global Environmental Solutions’ Xinnuo Water (Binzhou) Ltd which was transferred to 

Sino Water (80% held by PN) in July 2008. The company is based in Yangxin County, Shandong and 

specialises in waste water treatment. Sino Water is planning to spend MYR250million on seven 

projects in China (including in Jiaxing, Da Shi Qiao, Tai Zhou Development Zone and Nanyang City) 

and a proposed ‘Take Over-Operate –Transfer’ fort a 300,000m 3 /day wastewater treatment plant 

serving Jiaxing Province, all of which by 2013 will generate revenues of MYR100million pa. 

351 


MALAYSA 


RANHILL BHD 

Thailand 

2000 Amata City 15 year O&M 9,600m 3 /day wastewater 

2000 Amata City 15 year O&M 10,500m 3 /day water 

2000 Amata Nakom 15 year O&M 10,500m 3 /day water 

2005 Amata Nakom 20 year BOT 16,000m 3 /day wastewater 

2005 Amata Nakom 20 year BOT 20,000m 3 /day water 

2006 Amata Nakom 20 year BOT Recycled water 

In Thailand, RKWI has been operating three wastewater and potable water treatment plants since 

2000, serving Amata City Industrial Estate, through a 15 year BTO. RKWI received a Letter of Award 

in May 2005 for a second 20 year BOT for a 10.6 Ml/day water and a 9.6M/day wastewater and water 

recycling plant in Amata Industrial Estate (Phase 6). This will include a reverse osmosis facility and will 

be run by Anorak Water Treatment Facilities Co Ltd (AnuRAK), a special purpose vehicle. These 

contracts generated MYR2.5million of revenues in 2007. 


Name: Ranhill Utilities Bhd 

Address: 37 th Floor, Empire Tower, 181 Jalan Tun Razak, 50400 

Kuala Lumpur, Malaysia. 

Tel: +60-3-2171-2020 

Fax: +60-3-2775-8775 

Web: www.ranhill.com.my 

Web: www.saj.com.my 

Tan Sri Dato' Paduka (Dr) Sallehuddin Jaafar bin Mohamed (Chairman) 

Dato' Dr. Shahir bin Nasir (Non-Executive Director) 

Hamdan Bin Mohamed (President) 

Ahmad Zadhi Bin Jamal (CEO) 

352 


MALAYSA 


SALCON ENGINEERING BERHAD 

Salcon Engineering Berhad (SEB) was set up as a subsidiary of Kumpulan Emas Berhad in 2002, 

building upon KEB’s experience in the palm oil industry and engineering services for processing palm 

oil and treating process effluents and for providing water for these facilities. KEB has been involved in 

450 water and wastewater engineering projects in Malaysia, Thailand, Vietnam and China since 1974. 

SEB was Listed on the Kuala Lumpur Stock Exchange in August 2003 via a reverse takeover of Seng 

Hup Corporation Bhd. 

SEB concentrates on water and wastewater plant design, engineering, installing and O&M, along with 

related projects for the palm oil, timber and agricultural sectors. The Water & Environmental Division 

accounts for more than 50% of the company’s turnover and profits. SEB was part of the consortium 

that gained the MYR308million Greater Ipoh Water Supply II BOT in Perak. In October 2002, SEB 

gained a 10 year O&M contract for the Sungai Terip water treatment plant in Negeri Sembilan, 

including five supply dams and a raw water pumping station. The contract is worth MYR200million. A 

non revenue water reduction contract in Sandakan was completed in 2005 and has entered a second 

phase from February 2006. 

YE 31/07 (MYRmillion) 2003 2004 2005 1 2006 2007 

Water & environment turnover 5.0 88.8 109.2 73.8 87.2 

Wastewater turnover 1.4 51.5 42.4 38.9 36.4 

Turnover 7.5 146.8 162.4 121.3 134.6 

Water & environment profit 1.4 6.4 -29.8 -4.4 -10.9 

Wastewater profit 0.1 4.2 1.7 2.2 3.3 

Group operating profit 2.2 11.0 -27.7 -1.2 1.0 

Net profit 6.2 9.3 -27.8 4.3 -7.8 

EPS (MYR) N/A 0.04 -0.10 0.02 -0.02 

1 

2005 is for the 17 month period ended 31 st December 2005 

Salcon has projects serving 3.4million people in Vietnam and China. 

Vietnam 

1999 Ho Chi Minh City 20 year O&M 400,000 water 

In Vietnam, Salcon was part of the Malaysian consortium involved in the USD35.8million 100,000m³ 

per day Binh An Water Supply Scheme for the Thuan An District of Hi Chi Minh City. The O&M 

element runs for 20 years from 1999. 

China 

2005 Chenggong Country 30 year BOT 120,000 water 

Salcon Yunnan (HK), a 100% held subsidiary of holds 60% of a concession to construct and operate a 

20,000m³ per day expandable to 60,000m³ per day water treatment plant and managing the 

distribution services for the district of Chenggong, Kunming City. Chenggong is to house the new 

Kunming Municipal Government administrative buildings, at least 11 universities and a logistics centre 

for flowers and vegetable exports. 

2006 Haining 30 year BOT 500,000 water 

Salcon Zejiang (HK) holds 60% of a joint venture to build and operate a 300,000m³ per day water 

treatment plant in two 150,000m³ per day phases, the first was completed in November 2007 and the 

second will enter service in 2010. 

2008 Nan An City 30 year BOT 1,000,000 raw water 

353 


MALAYSA 


SALCON ENGINEERING BERHAD 

Salcon Fujian (HK) holds 65% of a consortium for a BOT project to supply raw water to Guan Qiao, 

Shui Tou and Shi Jing three towns in Nan An City in Fujian. The two phases will build a 48km pipeline 

to provide 345,000m³ of raw water per day at a total cost of MYR368million. 

2004 Changle County 50 year BOT 600,000 water 

The Shandong Salcon Changde Water Supply Company holds 75% of the equity of the Shandong 

Changle Salcon Water Supply Company, which has a 50 year water provision services concession for 

Changle County in Shandong. The stake was acquired for USD1.44million. The contract started in 

April 2005, involving managing a 20,000m³ per day water treatment plant and building a second one 

with a similar capacity. In 2008, the contract was extended to involve the construction of a new 

100,000m³ water treatment plant. 

2006 Changle County Acquisition 600,000 wastewater 

Shandong Salcon Changde Water Supply Company acquired the Shandong sewage treatment plant 

in April 2005. 20,000m³ per day water treatment plant and building a second one with a similar 

capacity. A 20,000m³ per day wastewater works (upgradable to 40,000m³ per day) is being taken over. 

2008 Changle Country 30 year BOT Raw water 

Shandong Salcon Changde Water Supply Company will invest MYR109million in a BOT project to 

supply raw water from Gaoya Reservoir 38km to a new 100,000m³ of water treatment works which is 

also being built by Salcon. 

2005 Linyi 30 year BOT 1,000,000 water 

In November 2005, a Strategic Partnership Agreement for the development of a 0.15million m 3 per day 

water supply project in Linyi City, Shandong Province was signed. Salcon’s other shareholders are the 

Linyi Municipality Industrial Product Jin Yin Real Property Development Company Ltd, China and the 

Linyi Municipality Water Supply Company. This is a 30-year concession to design, construct, operate, 

maintain, distribute potable water, with an estimated project cost of MYR600million. The JV company 

will have an initial registered capital of MYR200million. The project started in January 2006 and is 

currently delivering 80Ml/day of water. 


Name: Salcon Engineering Berhad 

Address: 

15 th Floor, Periaran Summit, 

Persiaran Kewajipan, USJ 1, 

47600 UEP, Subang Jaya, Selangor, Malaysia 

Tel: 6(03) 8024 8899 

Web: www.salcon.com.my 

Dato Seri Goh Eng Toon (Chairman) 

Lim See Teok (CEO) 

Dr Teoh Seng Foo (President) 

354 


MALAYSA 


TALIWORKS CORPORATION 

Taliworks Corporation (TC) has been involved in the management, operation and maintenance of 

water treatment plants and the supply of treated water since Malaysia’s first privatisation in 1987. It 

supplies 1,039.5million m 3 per day of water to the state of Selangor, the federal territory, and 

Langkawi Island, serving 2million people through the operation of six water treatment plants. 

Taliworks’s Malaysian water companies are as follows: 

1. Sungai Harmoni (100% held): Sungai Selangor Phase 1. One WTW, 950million L/day capacity, 

expires 2030. 

2. Taliworks Langkawi (100% held): Five WTWs in Langkawi Island & Perlis, 89.5million L/day 

capacity; granted in 1995 and expires 2020. This includes 20,650 customer accounts. 

In 2007, the two companies sold 772 MLD of water, with 733 MLD from SSP1 and 42 MLD from 

Langkawi. 

Taliworks Corporation, profit and loss account 

Y/E 31/12 (MYR) 2003 2004 2005 2006 2007 

Water treatment 123.9 131.3 126.5 131.6 126.3 


Pre-tax profit 50.8 38.3 57.4 50.3 46.7 

Net profit 36.6 27.7 44.1 35.7 33.7 


China and Indonesia 

2003 Guanghan 30 year BOT 200,000 wastewater 

Guanghan San Xin Dui is a 50,000m 3 per day wastewater treatment works in Sichuan Province, 

which is operated by Puresino (Guanghan) Water, an associate of Taliworks. The facility entered 

service in 2007. 

After gaining a waste management concession in Tianjin in 2004, the company is seeking water and 

wastewater concessions in China, Indonesia, Vietnam and the Middle East. In 2007, the company 

raised MYR225million through a bond issue for funding future expansion and aims to generate 50% 

of its revenues from international activities by 2012. In November 2007, the company was in talks 

regarding over 10 wastewater and waste management projects in China. 

In April 2008, Salcon signed a two year cooperation agreement with Shenzhen Hanyang Investment 

Holding Co to develop water, wastewater and waste management projects in China. Shenzhen 

Hanyang has operations in twelve cities across the PRC. 


Name: Taliworks Corporation 

Address: No. 28, Jalan Wan Kadir 1, Taman Tun Dr. Ismail 


Tel: +60-3-7725-7110 

Fax: +60-3-7725-7099 

Web: www.taliworks.com.my 

Web: www.saj.com.my 

Y Bhg Dato Haji Karim bin Munisar (Chairman) 

Dato Lim Ak Bak (Vice Chairman) 

Tuan Haji Abdul Rahman Bin Haji Siraj (CEO) 

Lim Chee Meng (Director) 

355 


MALAYSA 


YTL CORPORATION BHD 

YTL Corporation Bhd (YTL) has interests in power generation, construction contracting, cement 

manufacture, property development and hotels, and resorts and leisure. YTL Power International 

(61% held by YTL) is one of the largest independent power producers in South East Asia and has 

investments in regulated utilities in Australia. 

YTL Corporation Bhd, profit and loss account 

Y/E 06/12 (MYRmillion) 2003 2004 2005 2006 2007 

Water & sewerage turnover 1,735 2,037 2,328 2,369 2,649 


Operating profit 1,439 1,770 1,870 2,253 2,423 

Net profit 417 707 558 698 755 

Earnings per share (Sen) 39 48 40 49 51 

YTL acquired Wessex Water Plc (WW) for GBP1,240million in May 2002 when WW was sold by 

Enron. This is the first case of a company based in the developing economies acquiring a water and 

sewerage company from the developed world. In July 1998 Enron agreed terms with WW for a 

recommended cash offer for WW. The offer valued WW at GBP1.7 billion: GBP1.36 billion for WW’s 

share capital and WW’s net borrowings, which were GBP325million on March 31 1998. 

It is understood that YTL is examining potential projects in Asia. 

Wessex Water Services Ltd, profit and loss account for appointed businesses 


Water turnover N/A N/A N/A 123.8 138.4 

Sewerage turnover N/A N/A N/A 237.6 252.3 

Turnover 288.7 303.6 340.5 361.4 390.7 


Pre-tax profit 59.0 53.1 84.2 100.4 122.9 

Wessex Water supplies water to 1.2million people and sewerage services to 2.6million people in 

south west England. Leakage was eased from 73million L/day since 2004-07 to 72million L/day in 

2008, which at 20% is seen as the economic level. During 2005-10, the emphasis in terms of projects 

has shifted from sewage treatment towards drinking water quality and avoiding sewage flooding. 


Name: Wessex Water Services Ltd, 

Address: Claverton Down Road, Bath BA2 7WW. 

Web: www.wessexwater.co.uk 

Colin Skellet (Chairman) 


Name: YTL Corporation Bhd 

Address: 11 th Floor, Tiong Lay Plaza, 

55 Jalan Bukit Bintang, 55100, Kuala Lumpur, Malaysia. 

Tel: +60-3-2142-6633 

Fax: +60-3-2141-2703 

Web: www.ytl.com.my 

Y Bhg Tan Dato Seri Yeoh Tiong Lay (Chairman) 

Tan Dato Sri Francis Yeoh Sock Ping (MD) 

Bhg Dato Yeoh Seok Kian (Deputy MD) 

356 


MEXICO 


MEXICO 

AQUASOL 

Aquasol is a privately owned Mexican water engineering and operations company founded in 2000 to 

bid for municipal water treatment concessions in Mexico. In 2003-04, the company gained two 

concessions and was amongst the finalists for at least another two bids. 

In December 2003, Aquasol secured a 20 year, USD30million BOT concession for a 1,200L per 

second (103,500m 3 per day) agricultural water plant in Michoacan state capital Morelia. The facility will 

enter into service by the end of 2004. In January 2004, Aquasol secured a USD25million, 20 year BOT 

concession in Hidalgo State’s capital Pachuca. The 400L per second (34,500m 3 per day) Pachuca 

plant will provide two levels of water quality: one for agricultural use and another for industrial 

customers. Operations are expected to begin later in 2004. In each case, Aquasol is working in a 50- 

50 JV with Tecnologia Intercontinental (Ticsa, industrial wastewater treatment plant engineering) 

based in Mexico City. 

Aquasol strategy is to bid for 20 year BOT concessions because of the federal government's 

commitment to provide up to 40% of project financing. Typically, private equity makes up another 25% 

of costs and loans account for the remaining 35%. The company aims to bid for other projects in Latin 

America when similar financial packages are made available. 


Name: Aquasol SA de CV 

Address: Paseo del Carmen 30, Col. 

La Asuncion, 500000 Toluca, Mexico 

Tel: + 722 271 02 73 

Alfredo Marin Pasos (Operations Director) 

Rigoberto Mena (Manager) 

357 


PHILLIPINES 


PHILLIPINES 

BENGUET CORPORATION 

Benguet Corporation was founded in 1903 and is the oldest mining company in the Philippines. Due 

to the long term decline of its copper and gold mining activities, the company has decided to enter the 

water concessions market in the Philippines. 

Benguet Corporation, profit and loss account 

FY 31/12 (PHPmillion) 2003 2004 2005 2006 2007 

Net sales 264 296 307 257 299 

Operating income -82 -48 -134 -172 -136 

Net loss -419 -793 -270 -358 271 

Loss per share (PHP) -3.67 -6.95 -2.37 -3.14 2.31 

In 2003, Benguet gained a 136 month contract to manage the Kailangan, Bukidnon water system in 

Mindanao state in the Southern Philippines. Kailangan had a population of 27,000 in 1995, with 

940,000 living in the province of Bukidnon. This was handed over at the end of 2005. 

In 2005, Benguet also gained a similar contract serving Itogon and Baguio City, the capital of north 

Luzon and the nation’s summer capital. The Baguio City water project is estimated to cost 

USD60million and will include the construction and development of a water reservoir and distribution 

network for the entire city, providing 50-70million litres of water a day. Baguio City had a population of 

250,000 in 2000, with the population growing at 5% pa. Benguet has been seeking to provide 

additional water to the city since 1995, using the former Antamok open mine in the area as a reservoir 

with a potential capacity of 9million m 3 to provide 50,000m 3 of water per day. The 25 year contract can 

be renewed for a further 25 years and is expected to enter service in 2008. 


Name: Benguet Corporation 

Address: 3F, Universal Re-Building, 106 Paseo de Roxas, 

Makati City, 1226 Philippines 

Tel: 632 812 1380 

Fax: 632 813 6663 

Web: www.benguetcorp.com 

Fernando Martin G Romalodez (Chairman) 

Benjamin Philip G Romalodez (President and CEO) 

Leopoldo S Sision III (VP, Water) 

Salvador Pabalan (VP, Finance) 

358 


PHILLIPINES 


MANILA WATER CO 

In 1997, Metro Manila gained the 25 year concession for operating Manila’s East Zone, where 

5.6million people live. 35% of the company’s equity was sold when the company was Listed in 2005. 

Manila Water Co, profit & loss account 

Y/E 31/12 (PHPmillion) 2003 2004 2005 2006 2007 

Water 3,062.3 3,357.2 4,538.4 5,250.2 6,241.1 

Environmental Charges 305.9 339.9 464.9 532.1 637.3 

Sewerage 198.6 213.6 279.8 308.1 348.7 

Interconnection 1.2 0.0 0.0 0.0 0.0 

Interest 89.9 127.2 218.9 295.0 152.7 

Other 120.0 253.4 261.1 399.3 445.6 

Total revenues 3,777.9 4,291.2 5,763.1 6,784.7 7,825.4 

Net profits 1,150.5 1,329.7 2,011.5 2,394.2 2,419.0 

Earnings per share (PHP) 0.60 0.85 0.93 1.05 1.06 

Billed water (MLD) 767 825 864 948 1,040 

Non revenue water (%) 50.7% 43.4% 35.5% 30.3% 23.9% 

People served (million) 4.7 5.1 5.2 N/A 5.6 

Service connections (000) 397 426 458 N/A 589 

Households connected (000) 515 556 600 892 986 

Urban poor - connections (000) 101.0 123.3 141.0 170.2 214.0 

A number of service quality targets have been set. Sewerage and sewage treatment have made 

limited progress to date, but Manila Water almost achieved its goal of universal 24 hour water 

availability by 2007 against 26% availability in 1996, with 99% availability by the year end and by 

2008, there had been a reduction in non revenue water from its 63% level in 1997 to 20%. Household 

connected have increased from 325,000 in 1997 to 741,000 by 1Q 2006 an increase of 3million 

people being served. Under the Tubig Para Sa Barangay scheme, 644 projects have resulted in 

1.3million people from 214,000 poor households have been connected to the water network since 

1998, including 450,000 since 2005. 

Capex in 2007 was PHP4.4billion. The World Bank funded USD85million Manila Third Sewerage 

project aims to boost sewerage coverage from 10% to 30% by 2010, connecting 3.3million people. A 

PHP187billion 2007-22 investment plan has been drawn up. Sewerage coverage has increased from 

3% in 1997 to 12% by 2007. This is well behind original expectations. The current plan is to increase 

coverage to 30% by 2012 and 63% by 2022. 


Name: The Manila Water Company Inc 

Address: 489 Katipunan Road, 

Quezon City, 1105 Philippines 

Tel: 

(632) 926 7999 

Web: www.manilawater.com 

Antionio Aquino (President) 

Femando Zobel de Ayala (Chairman) 

359 


PHILLIPINES 


METRO PACIFIC INVESTMENTS 

The Metro Pacific Investment Co (MPIC) is an investment holding company. In June 2008, MPIC 

acquired shares in Maynilad from First Pacific and Ashmore Funds for USD197million taking its 

interest to 51%. MPIC now holds 55% of Bidco (DMCI-MPIC Water Co), the company which gained 

the 84% stake in Maynilad Water from MMWSS in January 2007. D.M. Consunji holds the other 45% 

of Bidco. 

Maynilad Water Services, Inc. (MWSI) was awarded the western half of the Metro Manila water 

distribution concession in August 1997. MWSI has suffered from a mid concession-life crisis when 

MWSI took on 90% (USD800million) of MWSS’ foreign debt, which between 1997 and 2000 doubled 

in Peso terms from PHP20billion to PHP40billion due to the Peso’s weakness. Although MWSI gave 

notice to halt the concession in March 2003, continuing arbitration and associated legal processes 

have meant that it continues to run under its current structure. The November 2003 and April 2004 

agreement would have resulted in a write-off of PHP3.8billion (PHP3.2billion in equity and 

PHP629million in debt) and the loss of control in MWSI. On April 29, 2005, MWSI and its bank 

creditors, along with the MWSS executed a Debt Capital and Restructuring Agreement. As part of 

this, MWSS acquired 83.97% of the shares of MWSI, with Ondeo holding the remaining shares. In 

return, the creditors released it from loan obligations worth a total of USD220million. 

MPIC, profit & loss account 

Y/E 31/12 (PHPmillion) 2005 2006 2007 

Total revenues 2,173 1,799 7,006 

Maynilad – Net profit N/A 1,004 1,255 

MPIC – Net profit 209 -689 203 

Earnings per share (Ps) 0.19 -0.72 0.06 

Billed water (million m 3 ) N/A 262 286 

Non revenue water (%) 69% 68% 66% 

People served (million) N/A N/A 5.9 

Service connections (000) 660,000 677,985 703,519 

Sewage connections (000) N/A N/A 67,420 

The West Zone concession area covers eleven cities in Metro Manila (Pasay, Caloocan, Las Piñas, 

Parañaque, Valenzuela, Muntinlupa, Manila except portions of San Andres and Sta. Ana, some parts 

of Makati and Quezon City, Malabon and Navotas) and one city (Cavite City) and five towns in Cavite 

province (Rosario, Imus, Noveleta, Bacoor and Kawit). 

There were 710,450 customers in March 2008. In February 2008, Maynilad repaid its outstanding 

USD232million loan and the company was released from administration. In 2007, 72% of the zone’s 

7.52million people were covered. 24 hour coverage for the entire concession area is planned for 

2012, along with lowering NRW to 40%. A PHP44billion capex programme is underway from 2008 to 

2012, with PHP8billion for 2008 against PHP5billion in 2007. 


Name: Metro Pacific Investments 

Address: 10/F MGO Building, Legazpi cor. Dela Rossa Street, 

Legazpi Village 0721 Makati City, Philippines 

Tel: 

(632) 888 0888 

Web: www.mpic.com.ph 

Manuel V Pangillan (Chairman) 

Jose Ma K Lim (President & CEO) 

Randolph T Estrellado (CFO) 

360 


SINGAPORE 


SINGAPORE 

ASIA ENVIRONMENT HOLDINGS LTD 

Asia Environment Holdings (AEH) was listed on the Singapore Stock Exchange in November 2003. 

AEH operates in China under the Penyao trade name and since its foundation in 1984 has 

progressively moved from water engineering to turnkey contracting to BOT contracts. More than 300 

projects have been completed to date. Since 2001, 13 BOT and TOT contract awards in China have 

been identified, including water provision contracts for 1.875million people and wastewater treatment 

contracts covering 800,000 people as well as a series of industrial wastewater treatment contracts. 

AEH, profit & loss account 

Y/E 31/12 (CNYmillion) 2003 2004 2005 2006 2007 

Water engineering turnover 22.4% 29.8% 41.3% 27.1% 20.1% 

Turnkey projects turnover 77.6% 70.2% 57.6% 72.9% 79.1% 

BOT turnover 0.0% 0.0% 1.1% 0.0% 0.8% 


Net profits 30.4 12.9 43.2 64.4 81.8 

Earnings per share (RMB cents) 16.72 4.77 15.03 22.28 25.36 

2008 Danyang 30 year BOT 500,000 water 

In July 2008, AEH entered into a Preliminary Agreement with Danyang Municipal Government 

regarding a BOT project involving a group of six wastewater treatment plants in Fangxian, Daoshu, 

Erling, Xinqiao, Houxiang and Shitu towns in Danyang City, Jiangsu Province. This involves the 

construction and operation of six wastewater treatment plants and the installation of connecting pipes 

of approximately 48km long. The total planned capacity of the wastewater treatment plants is 

140,000m 3 /day, with a Phase 1 capacity of 55,000m 3 /day. 

2008 Xinning 30 year BOT 350,000 wastewater 

In May 2008, AEH’s Xining Penyao Wastewater Treatment gained a concession to acquire, expand 

and operate a wastewater treatment plant in Xining City, Qinghai Province. This involves an existing 

wastewater treatment plant with a capacity of 85,000m 3 /day and expanding its treatment capacity to 

135,000m 3 /day. The investment value of the project is approximately CNY238million. 

2008 Anqing 30 year BOT Industrial wastewater 

A contract for the Anqing Economic Development Zone for Anqing, Anhui province for a 30 year 

concession involving the construction of a 10,000m 3 /day wastewater treatment plant. 

2007 Lishui 28.5 year BOT 100,000 wastewater 

In November 2007, AEH gained a concession to build and operate a wastewater treatment plant in 

Lishui county, Nanjing city, Jiangsu province for a wastewater treatment plant with total capacity of 

40,000m 3 /day. 

2007 Jingdezhen 20 year BOT 250,000 wastewater 

Jingdezhen City is in Jiangxi Province. The project involves the construction of a wastewater 

treatment plant with a total capacity of 80,000m 3 /day. The total investment of the project, which was 

announced in June 2007 is estimated at CNY78million. 

2007 Wangcheng County 27 year BOT 125,000 water 

AEH’s Jiangsu Penyao Environmental Engineering Contract Co. has entered into a BOT with 

Wangcheng County Government to build and operate a wastewater treatment plant in Wangcheng 

361 


SINGAPORE 



County, Hunan Province. This involves the construction of a wastewater treatment plant with total 

capacity of 40,000m 3 /day. The total investment of the project is CNY57million. 

2007 Shanghai 26 year BOT Industrial wastewater 

In April 2007 AEH gained a BOT with the Shanghai Jinshan Zone Industrial Park II to build and 

operate a wastewater treatment plant in the Jinshan Industrial Park II. This involves the construction 

of a wastewater treatment plant with total capacity of 50,000m 3 /day, of which the Phase 1 capacity is 

25,000m 3 /day. The total investment for the first phase of the project is estimated at CNY100million. 

2007 Suzhou 20 year BOT Industrial wastewater 

A BOT for a wastewater treatment facility with a total capacity of 50,000m³ per day and laying of a 

wastewater piping network within the Fenhu Economic Development Zone. The first phase, costing 

CNY95million involves the construction of a 25,000m³ per day wastewater treatment plant and laying 

of the wastewater piping network. 

2006 Harbin 20 year BOT Industrial water & wastewater 

In October 2006, a CNY185million contract for the Harbin Binxi Economic Development Zone was 

signed. When complete, the plant will have capacity to treat 60,000m 3 per day of water and to treat 

50,000m 3 per day of wastewater discharged by the Harbin Binxi Economic Development Zone. Phase 

I of the project is estimated to be around CNY190million for half the capacity for both facilities. 

2006 Zhangzhu 25 year TOT 100,000, wastewater 

AEH’s Yixing Penyao Water Company gained the TOT in September 2006 for Zhangzhu Town, 

Yixing City, Jiangzu Province, the People's Republic of China. This involves the acquisition of a 

wastewater treatment plant for SGD16million with a treatment capacity of 10,000m 3 /day and 

operating the plant for a 25 years concession period. The total revenue to be derived over the 

concession period amounts to CNY114.6million. AEH has the right to develop the 2nd and 3rd phase 

of the wastewater treatment plant, each phase expanding the treatment capacity by 10,000m 3 /day. 

The Company intends to fund the acquisition from its internal resources and bank borrowings. 

2005 Pizhou 25 year BOT 250,000, water 

In September 2005, AEH gained a CNY82million 25 year BOT contract for building a 100,000m 3 per 

day water treatment works serving Pizhou City: in Jiangsu Province. The work will be carried out in 

two equal phases, Phase 1 (CNY43million) being completed by the end of 2006. In November 2005, 

a joint venture was set up between AEH (25%), Dayen (50%, see Company Entry) and Lionguard 

(25%, Richfull Holdings of HK, an infrastructure investment company) for the project. 

2004 Nanchang 25 year BOT 750,000, wastewater 

The Nanchang wastewater treatment BOT was signed in 2004. It covers the construction of a 

200,000m 3 per day wastewater treatment plant, with a 20 year operations contract. Construction was 

62% complete by the end of 2005 and the facility is entering service during 2006 with a total 

investment of CNY171million. AEH holds 12.88% of the operating company. The 200,000m 3 per day 

facility entered service in November 2007. The contract will generate revenues of CNY625million. 

AEH’s Nanchang Water Holdings Private Limited acquired the outstanding 49% of Nanchang Penyao 

Water Supply Co. in November 2007. 

2004 Nantong 25 year BOT 550,000, water 

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In July 2004, AEH signed a CNY398million deal to build a water treatment plant in Nantong City in 

Jiangsu province. The 25 year BOT project will treat and supply 200,000m 3 of water daily to the city. 

AEH have an option to construct two more phases to provide extra capacity of 400,000m 3 of water 

per day. Since 2007, AEH has held 100% of the contract. In May 2006 SIIC Shanghai subscribed 

USD5million for a 30% holding in the company to provide working capital for the construction work. 


Name: Asia Environment Holdings Limited 

Address: 77 Robinson Road, 15-01 SIA Building, 

Singapore 068896, Singapore 

Tel: +65 6323 2343 

Fax: +65 6323 4223 

Web: www.asiaenv.com 

Wang Chun Lun (Chairman) 

Wang Hong Chun (CEO) 

Koh Poh Yeoh (Chief Financial Officer) 

Wang Chun Lin (Director, Chairman Penyao) 

363 


SINGAPORE 


BOUSTEAD SINGAPORE LTD 

Boustead Singapore is an investment company specialising in a range of engineering applications, 

information technology and investment services and dates back to 1828. Engineering activities 

include process control systems. Water engineering activities are carried out through Salcon Limited 

(not related to Salcon Bhd., see Malaysia company entry), of which Boustead acquired 63% in 2003, 

increasing this to 100% in 2006. Salcon Limited has to date completed 800 water and wastewater 

treatment projects in 57 countries, mainly in Asia and the Middle East. 

Y/E 31/03 (USDmillion) 2004 2005 2006 2007 2008 



Net profits 13.3 26.7 38.7 35.2 51.5 

Earnings per share (USD c) 6.3 6.2 9.9 13.9 20.1 

Indonesia 

In July 2004 Boustead signed a Heads of Agreement with the Sultan of Yogyakarta, for the 

Government of Yogyakarta Province, Indonesia for a 25 year DBOT for the supply of treated water to 

the city of Yogyakarta and its sub districts of Sleman and Bantul with a total population of 2.2million 

people. Currently, just 19.8% of the Province is provided with potable water. With the completion of 

the whole project, it is expected that 60 to 70% of the population will be supplied. 

The project is to be carried out in three phases. Phase 1 will have a capacity of 100,000m 3 per day 

and will cost USD35million to develop and will be completed by the end of 2006. Phase 2 is expected 

to be executed by 2009 and will expand the water supply facility to a capacity of 300,000m 3 per day 

for USD20million. Approval for Boustead’s 51% investment in PT Citra Tirta Mataram was received in 

July 2005. The Engineering, Procurement and Construction (EPC) contract for the whole project will 

be carried out by Boustead's Water and Environmental Division, which includes Salcon Limited. The 

EPC portion of the contract is expected to generate material income for Boustead's Water and 

Environmental Division. 

China 

In July 2005, Boustead was awarded a CNY137million contract for the construction of a 40,000m 3 per 

day desalination facility serving Tianjin. The facility will enter service by the end of 2006, when the 

company will operate it for an unspecified period. 


Name: Boustead Singapore Limited 

Address: 63 Ubi Avenue 1, 06-01 Boustead House, 

Singapore 408937, Singapore 

Tel: +65 6747 0016 

Fax: +65 6741 8689 

Web: www.boustead.sg 

Wong Fong Fui (Chairman and CEO) 

Loh Kai Keong (Chief Financial Officer) 

Saiman Ernawan (Deputy Chairman) 

364 


SINGAPORE 


DARCO WATER TECHNOLOGIES PTE 

Darco Water Technologies Pte (DWT) was listed on the Singapore Stock Exchange in July 2002 in 

order to improve corporate visibility when tendering for water contracts. The company was set up in 

1999 by a group of individuals who had previously operated in the industrial water treatment sector. 

Target markets are Singapore, Malaysia, China, Taiwan, Indonesia and the Philippines. 

Darco Water Technologies Pte, profit and loss account 

Y/E 31/12 (SGDmillion) 2003 2004 2005 2006 2007 

Water engineering turnover 20.83 36.04 43.83 54.44 71.45 

Water management turnover 11.66 12.91 9.25 11.71 14.45 



Net profits 2.35 2.06 5.72 2.08 3.24 

Earnings per share (SGD) 1.40 1.00 3.06 1.29 1.53 

China 

2002 / 06 Deqing 25 year BOT 450,000, water 

DWT has expanded from developing water treatment systems into offering BOT contracts. The 

company gained a 22 year potable water treatment plant BOT contract in July 2002 for Deqing in 

Zhejiang Province, China. The contract was awarded to Darco’s 75% held subsidiary Globe 

Environmental (70%) with two provinces holding the outstanding 30% of the Zhejiang Deqing Globe 

Water Treatment Co Ltd. This is for the provision of 60,000m 3 of water per day, serving 450,000 

people. The SGD13.2million facility entered service in May 2006 after being held up by a dispute, 

which was mediated by the World Bank, and will generate revenues of SGD4-5million per annum. 

In May 2006, two further 25 BOT projects serving the city were gained. [1] For the extension to the 

existing BOT project, with the second phase of the current BOT project being the same size as the 

first, 60,000m 3 of water per day. Darco plans to invest SGD9.6million in the project which will 

generate a total revenue of SGD60-75million over 25 years, or SGD4-5million per year. [2] For a 

water treatment project with a capacity to produce 100,000m 3 a day. The estimated cost of 

investment for this project is SGD19.2million. The plant will supply water to residents and industries, 

with the major user of the water being a large brewery to be built in Deqing. The total revenue from 

the project is SGD82.5-105million over 25 years, or SGD3.5-4.2million per year. 

Indonesia 

2007 Bangka Island 20 year O&M 150,000, water 

In October 2007, PT Darco Indonesia (PTDI) [fore]signed an agreement with Bangka Island for the 

Engineering Procurement & Construction (EPC), Operation & Maintenance (O&M) of a water 

treatment purification facility in Pangkalpinang City, Bangka Island, Indonesia, amounting to 

approximately IDR775billion (SGD130.8million). PT Darco shall receive IDR89.5billion 

(SGD15.1million) to upgrade the existing water treatment plant capacity from 12,000m 3 /day to a 

capacity of 36,000m 3 /day within 18 months, followed by a 20 year O&M contract, where PTDI shall 

receive 70% share of the revenue. The O&M contract is expected to generate a total recurring 

revenue of approximately IDR980.5billion (SGD165.4million) for the partnership, starting in mid 2009. 

In May 2003, DWT paid USD3million to acquire a 10% stake in PT Air Bintan Biru (PTABB), with an 

option to increase this stake to 25%. PTABB was founded in September 2002 to develop water 

resources and concessions in Riau province of Indonesia and seeks to supply water from the 

province to Singapore under a 25 year supply agreement. In early 2004 Darco Environmental 

(Philippines) Inc. secured a six year BOO contract for the supply of ultra-pure water to SunPower 

Philippines Manufacturing Ltd., a company engaged in the manufacture of solar cells. 

365 


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DARCO WATER TECHNOLOGIES PTE 

Taiwan 

2005 Hsin Chu 25 year BOT 150,000, wastewater 

During 2005, Darco, in partnership with Taiwan’s Leader Construction Co Ltd., gained the 

NTD1.66billion (SGD83.78million) turnkey contract awarded by the Interior Ministry of Taiwan for the 

engineering design, construction and commissioning of a 30,000m 3 per day wastewater treatment 

plant serving Hsin Chu City’s Ker-Ya Municipal Water Resources Recovery Centre. Darco will run a 

five year operation and maintenance contract, worth SGD8.75million. The complete facility will have a 

190,000m 3 per day cubic peak flow capacity. The O&M will commence in 2008. 


Name: Darco Water Technologies Pte 

Address: 41 Loyang Drive, Singapore 

508952, Singapore 

Tel: +65 6545 3800 

Fax: +65 6545 3770 

Web: www.darcowater.com 

Thye Kim Meng (CEO/MD) 

Lee Sue Lin (Director, Process Engineering & Design) 

Teh Swee Heng (Director, Business Development) 

Lim Boon Kuan (CFO) 

366 


SINGAPORE 


EPURE INTERNATIONAL LIMITED 

Beijing Sound Environmental Industry Group (Sound Group) was a privately owned company, 

founded in 1993 and had a turnover of CNY200million in 2000, employing 180 senior engineering 

staff. Sound Group entered the water and waste treatment sector in 1999 and had completed 600 

projects in China. In September 2006, as Epure International, the company had its IPO on the 

Singapore stock exchange. 

Epure, profit & loss account 

Y/E 31/12 (USDmillion) 2004 2005 2006 2007 

Group turnover 226.7 380.1 505.6 697.3 

Operating profits 57.1 96.6 137.6 195.0 

Net profits 47.2 79.9 110.6 164.4 

Earnings per share (USD) 0.05 0.09 0.11 0.13 

Sound Group’s ‘China Clear Water Project’ was launched in 1999 to encourage the concept of locally 

funded WWTW BOT contracts. In June 2001, Sound Group signed agreements to build sewage 

treatment plants in 11 Chinese cities. These include Golmud in Qinghai Province, Jinshan District (of 

the Shanghai Municipality), Jianzhou, Jianyin, Huanggang and Xiangtan in Hubei Province. The 11 

sewage treatment plants will have a combined daily handling capacity of more than 1.7million tons. 

This is equivalent to serving approximately 5million people. These facilities will require a total 

investment of about CNY2billion (USD240million). The BOT contracts signed are to last for 25 years. 

The company expects the facilities to pay off the project financing after ten years. These are the first 

privately financed and operated sewage treatment facilities in China. Further contract awards have 

subsequently been gained. 

Facilities in operation or development, 2006-08: 

Henan 

Huixian 

Henan 

Gongyi 

Henan 

Anyang (CNY128million, 100,000m 3 per day WWTW) 

Henan 

Luoyang Chandong District 

Beijing Xiaojiahe WWTW (BOT, 2000) 

Hebei 

Zhengding (20,000m 3 per day WTW) 

Shandong 

Ningyang 

Shandong 

Jinan Changqing Economic and Technical Development Zone 

Shandong 

Feicheng 

Shandong 

Fenshang 

Shandong 

Linyi 

Shandong 

Dongping 

Shandong 

Xintaixinwen 

Shanxi 

Datong 

Shanxi 

Taiyuan Northern Middle of Hexi 

Hubei 

Jingmen Xiajiawan (BOT, 2003, 50,000m 3 per day WWTW) 

Hubei 

Xianning (25 year WWTW BOT) 

Hubei 

Xiangfan (SGD165million, 200,000m 3 per day WWTW) 

Hubei 

Zhushan (30,000m 3 per day WWTW) 

Hubei 

Danjiangkou (100,000m 3 per day WWTW) 

Hubei Yichang Yiling District (200,000m 3 per day WWTW by 2010) 

Hubei 

Yichang (440,000m 3 per day WTW) 

Jiangsu 

Wuxi Shuofang 

Jiangsu 

Wuxi Shitangwan 

Jiangsu 

Shuyuan (50,000m 3 per day WTW BOT) 

Jiangxi 

Nanchang Xianghu (SGD185million, 200,000m 3 per day WWTW) 

Inner Mongolia Xilinhaote 

Inner Mongolia Tonglaio (100,000m 3 per day 25 year WWTW BOT) 

Inner Mongolia Wuhai 

Inner Mongolia Baotou (CNY320million, 200,000m 3 per day WWTW BOT, 2006) 

367 


SINGAPORE 


Gansu 

Xinjiang 

Guangdong 

Yunnan 

Zhejiang 

Zhejiang 

Baiyin 

Dushanzi 

Heyuan 

Chuxiong 

Huzhou (30,000m 3 per day WTW BOT) 

Hecun, Tonglu (50,000m 3 per day WTW) 

In 2006, the World Bank’s IFC decided to invest CNY80million in the company in order to support its 

project development. Sound Group believes that it is the largest Chinese private sector WWTW 

operator. 


Name: Epure International Limited 

Address: 460 Alexandra Road, PSA Building 14-04 

Singapore, 119963 

Tel: 8610-6050-4718 

Fax: 8610-6050-4766 

Web: 

Wen Zibao (Chairman) 

Wang Zhili (CEO) 

Choo Beng Lor (CFO) 

368 


SINGAPORE 


HYFLUX LTD 

Hyflux Ltd designs, manufactures and operates water and wastewater treatment and conditioning 

systems. In recent years, the company has entered into a number of industrial water outsourcing 

contracts. Its traditional customers have been the Singapore Public Utilities Board (PUB) and the 

Environment Ministry. The proportion of revenues in industrial projects shifted from 81% in 2004 to 

44% in 2005 as various BOT projects entered their construction phase. 

Between 2004 and 2007 Hyflux gained a series of water treatment BOT contracts with a total 

treatment capacity of 500,000m 3 per day, which will enter service between 2006 and 2008. These will 

generate SGD80-90million pa in operating revenue, some 30-40% of forecast group revenues. 

In 2003, Hyflux gained a 20 year desalination BOT contract from the Singapore PUB. Construction of 

the Singspring facility will cost SGD250million. This contract supplies 136,380m 3 of water per day for 

the Government’s Public Utilities Board since September 2005 and will run for 20 years, generating 

SGD30-50million pa. In June 2003, Hyflux acquired Suez’s 30% stake in Singspring Pte Ltd for a 

"nominal consideration". The total equity investment in Singspring will be SGD50million with the other 

SGD200million coming from debt financing. Hyflux's share of the equity investment amounted to 

SGD35million with Suez’s stake being sold to Singapore’s Tamasek Holdings. 

Industrial outsourcing in Singapore 

In November 2002, Hyflux gained a construction and three year renewable operation contract for the 

provision of process water to ISK’s Tuas titanium dioxide plant in Singapore. ISK is owned by Ishihara 

Sangyo Kaisha of Japan. 

Hyflux Ltd, profit and loss account 

Y/E 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Turnover 81.2 88.66 131.54 142.38 192.79 


Net profit 19.5 27.88 49.19 15.36 36.65 

Earnings per share (USD c) 7.7 5.4 8.9 3.0 6.2 

Hyflux Water Trust 

HWT was partially floated in November 2007. It is a special purpose company set up by Hyflux to 

manage its Chinese concession contracts. There are three water treatment works, eight wastewater 

treatment works and two water recycling plants in HWT’s portfolio of 13 projects in 11 locations and a 

design capacity of 445,000m 3 per day. HWT may in time include concession contracts gained in other 

countries. 

Four projects have an uncertain status as to their being set to be transferred from Hyflux to HWT. 

2007 Tianjin 30 year BOT Desalination 

The facility is in Bohai Bay in Dagang and will have a daily capacity of 100,000m³, expandable to 

150,000m³. This will be the largest seawater desalination facility in China. 

2007 Mancheng 30 year TOT 250,000, wastewater 

Serving Mancheng County in Hebei Province, the current 30,000m³ per day plant will be supported by 

a new 80,000m³ per day plant and a 30,000m³ per day water recovery facility. 

2007 Xiajin 28 year BOT 200,000, water 

This will be the largest WTW in Xiajin, Shandong Province, with a capacity of 50,000m³ per day. 

2007 Xuzhou 25 year BOTs Water & wastewater 

369 


SINGAPORE 


HYFLUX LTD 

Two BOTs for the Jiawang, Xuzhou Chemical Industrial Park in Jiangsu Province, with 30,000m³ per 

day of potable water and 25,000m³ per day of wastewater treatment. 

Chinese contracts under Hyflux Water Trust since November 2007 

2007 Changshu City 25 year BOT Industrial wastewater 

Serves an industrial park in Changshu City, Jiangsu Province with a design capacity of 30,000m³/day, 

which may be expanded to its concession capacity of 60,000m³/day. 

2007 Tiazhou 20 year BOT Industrial wastewater 

In the Gao Gand District, in Jiangsu Province with a design capacity of 20,000m³/day, which may be 

expanded to include a water recycling facility. 

2007 Wuxi City 20 year BOT Industrial wastewater 

Serves an industrial park in Wuxi City, Jiangsu Province with a design capacity of 20,000m³/day, 

which may be expanded to include a water recycling facility. 

2007 Tiantai 20 year BOT 100,000, wastewater 

For municipal and industrial wastewater in Tiantai County, Zhejiang Province with a design capacity 

of 20,000m³/day, which may be expanded and to include water recycling. 

2007 Langfang 25 year TOT 400,000, wastewater 

Mainly for municipal wastewater in Langfang City in Hebei Province. This has a design capacity of 

80,000m³/day, and may in future incorporate a water recovery unit with a capacity of 40,000m³/day. 

2007 Yangkou 30 year BOT Industrial wastewater 

Serves the Yangkou Chemical Industrial Park in Rudong County, Jiangsu Province with a design 

capacity of 20,000m³/day, which may be expanded to its concession capacity of 40,000m³/day. The 

facility will also provide 25,000m³/day of recycled water. 

2007 Liaoyang 30 year BOT Industrial wastewater 

Serves municipal users and an industrial park in Lioyang City, Liaoning Province with a design 

capacity of 30,000m³/day, which may be expanded to its concession capacity of 60,000m³/day. The 

facility will also provide 25,000m³/day of recycled water to the local mining industry. 

2007 Yangzhou 20 year BOT Industrial water 

Serves the Yangzhou Chemical Industrial Park in Yi Cheng, Nantong, Jiangsu Province. The facility 

will be developed in three phases with a final capacity of 100,000m³ per day and will incorporate 

water recovery. 

2007 Defeng 30 year BOT Industrial water 

Serves the South Port area in Defeng, Jiangsu Province with a design capacity of 20,000m³/day, 

which may be expanded. 

370 


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HYFLUX LTD 

2007 Zunhua 25 year BOT 100,000, water 

Serves municipal, commercial and industrial customers in the southern area of Zunhua City, Hebei 

Province, with a design capacity of 40,000m³/day, which may be expanded. 

2007 Tianjin 30 year BOT Industrial wastewater 

Serves the Jing Jin hi-tech industries belt in Beichen, Tianjin with a design capacity of 50,000m³/day 

(wastewater treatment) and 30,000m³/day (water recovery) each of which may be doubled. 

A further six projects with a combined design capacity of 290,000m 3 /day and an approximate value of 

SGD180million are to be transferred to HWT during 2008-09: 

[1] Wastewater Treatment Plant with a design capacity of 10,000m 3 /day, in Huishan District Wuxi City, 

Jiangsu Province 

[2] Two Water Treatment Plants with a combined design capacity of 60,000m 3 /day, in Xuecheng 

District, Shandong Province 

[3] Water Treatment Plant with a design capacity of 40,000m 3 /day, in Gong Changling District, 

Liaoyang City, Liaoning Province 

[4] Wastewater Treatment Plant with a design capacity of 30,000m 3 /day, in Minguang City, Anhui 

Province 

[5] Wastewater Treatment Plant with a design capacity of 30,000m 3 /day and two Water Treatment 

Plants with a combined design capacity of 100,000m 3 /day, all in Guanyun County, Lianyungang City, 

Jiangsu Province 

[6] Wastewater Treatment Plant with a design capacity of 20,000m 3 /day, in Rudong County, Yangkou 

City, Jiangsu Province 


Name: Hyflux Ltd 

Address: Hyflux Building, 

202 Kallang Bahru, Singapore 339339 

Tel: +65-6214-0777 

Fax: +65-6214-1211 

Web: www.hyflux.com 

Olivia Lum Ooi Lin (President / CEO / MD) 

Grace Goh (CFO) 

Foo Hee Kiang (COO) 

371 


SINGAPORE 


SEMBCORP INDUSTRIES LTD 

Sembcorp Utilities (SU), a subsidiary of Sembcorp Industries Ltd, provides multi-utility services for 35 

industrial customers on Jurong Island in Singapore. These include industrial process water (35,000m 3 

per day via six reverse osmosis plants), demineralised water (26,600m 3 per day), cooling and 

refrigerated water and wastewater treatment via three dedicated facilities (5,520m 3 per day) and on 

an O&M basis. The company has two wholly owned utility subsidiaries in Singapore; SUT Sakra and 

SUT Seraya, which serve 27 corporate customers as well as other Sembcorp subsidiaries in 

Singapore’s Jurong Island. 

Sembcorp Utilities, profit and loss account 

Y/E 31/12 (SGDmillion) 2003 2004 2005 2006 2007 

Utilities 1,444 2,495 2,945 3,426 3,736 


Net profit 285 391 303 1,031 526 


Sembcorp Utilities was established in 1999 to gain O&M and BOT contracts for municipal and 

industrial water and wastewater projects in the region. Sembcorp Water’s 18% stake in Cathay 

International Water was sold back to Cathay and Cathay International Overseas Holdings for 

USD44.8million in June 2003. 

41% of Sembcorp Utilities revenues in 2007 were from the UK, 49% from Singapore and 10% from 

the rest of the world. The company can treat 4million m 3 of water per day and treat 0.14million m 3 of 

water per day. 

Singapore 

2008 Changi 25 year BOT 400,000 water 

Sembcorp NEWater Pte Ltd was awarded a 25-year NEWater agreement with PUB in February 2008, 

to design, build, own and operate Singapore's largest NEWater plant at Changi and supply PUB with 

228,000m 3 of NEWater a day from 2010. The first-year price for NEWater is USD0.29966 per m 3 . By 

2009, the Changi NEWater Plant will be partially completed with an initial capacity of 15mgd. 

UK 

SembUtilities UK provides water services to industrial customers on the Wilton International on 

Teesside, including 120,000m 3 per day of raw water and 48,000m 3 per day of demineralised water. 

This was acquired for GBP106million and the company has invested GBP233million in the facility. 

China 

A BOT for a wastewater facility for the Nanjing Chemical Industrial Park (NCIP) in Jiangsu Province 

was awarded to Sembcorp in 2003. Sembcorp has a 75% stake in Nanjing Sembcorp Suiyu, along 

with Singapore Utilities International (20%) and Nanjing Chemical Industrial Park Company (5%). The 

USD10million first phase had an initial capacity of 12,500m 3 per day from 2005. A SD22million 

expansion to 30,000m 3 per day was announced in 2007. In September 2005, Sembcorp acquired 

70% of NCIP SembCorp Water for a 100,000m 3 per day water treatment plant BOT serving the park. 

In June 2005, SembCorp established an 80% / 20% joint venture to acquire, expand, own and 

operate a 35,000m 3 per day integrated industrial wastewater treatment plant in the ZhangJiaGang 

Free Trade Zone in Jiangsu Province, China. 

A joint venture contract to build, own and operate an industrial wastewater treatment plant in Tianjin 

Lingang Industrial Area (TLIA) was announced in 2007. SembCorp Utilities holds 90% of the joint 

venture company, SembCorp TLIA Wastewater Treatment Company. The CNY70million facility will 

treat industrial wastewater from chemical industries in TLIA and have a capacity of 10,000m 3 per day. 

SEMBCORP INDUSTRIES LTD 

372 


SINGAPORE 


Upon completion early 2008, the facility will undergo an expansion of a further 20,000m 3 per day by 

end 2008 at a cost of CNY84million. 

In July 2008, SembCorp gained a 30 year (plus 20 year option) to own, manage & operate three 

water treatment works in the Shenyang Economic & Technological Development Zone in Liaoning 

Province, with a design capacity of 160,000m 3 per day. 


Name: Sembcorp Industries Ltd 

Address: 30 Hill Street, #05-04, 

Singapore 179360 

Tel: +65-6723-3113 

Fax: +65-6822-3254 

Web: www.sembcorp.com.sg 

Peter Seah Lim Huat (Chairman) 

Tang Kin Fei (President & Chief Executive Officer) 

Lim Joke Mui (Chief Financial Officer) 

373 


THAILAND 


THAILAND 

THAI TAP 

Thai Tap holds two water concessions in Thailand, Thai Tap Water (TTW), formed in 2000 and 

entering service in 2001 and Pathum Thani Water, a concession dating back to 1995. The contracts 

were originally developed between Thames Water (UK) and CH Karnchang (Thailand) until the former 

company pulled out of its international activities. CK Karchang increased its stake in TTW from 29.1% 

to 90.2% during 2005 after buying Thames out of the Joint Venture. In 2006, 35% of TTW was sold to 

Mitsui Water Holdings (Thailand) Limited and 5% to Bangkok Expressway PCL, retaining 48% of the 

company. In May 2008, 25% of Thai Tap was floated on the Bangkok stock exchange. 

Y/E 31/12 (THOmillion) 2004 2005 2006 2007 

Water sales (000m 3 / day) 141 209 221 274 

Water sales – company N/A 1,356 1,698 1,987 

Water sales – PWA N/A N/A N/A 580 

Water sales – total N/A 1,356 1,698 2,567 

Group Revenues N/A N/A 1,722 2,623 

Operating profit N/A N/A 1,121 1,595 

Net profit N/A N/A 674 920 

Earnings per share (THO) N/A N/A 0.21 0.28 

1995 Northern Bangkok 25 year BOOT 800,000 water 

The contract was awarded to Pathum Thani Water Supply Co., Ltd a joint venture between Thames 

Water and CH Karnchang. The contract in Pathum Thani (a northern area of Bangkok) has performed 

to expectations, with the THO5.0billion (USD152million), 0.288million m 3 per day water treatment 

plant entering service in October 1998. Karnchang coordinated a THO4,072million long-term debt 

facility with two Thai banks in 1998. The Provincial Water Authority will be responsible for collecting 

customer payments. The contract can be extended by up to 20 years. In 2007, CH Karchang sold its 

remaining shares in Pathum Thani to Thai Tap. Thai Tap holds 98% of Pathum Thani’s equity, with 

the PWA holding the other 2%. 

2001 West Bangkok 30 year BOT 400,000 water 

A THO9,639million (USD240million) contract originally signed between Thames Water and CH 

Karnchang of Thailand and the Provincial Water Authority (PWA) is to develop a 0.32million m 3 per 

day distribution system, which serves 400,000 people and industrial customer in Bangkok’s Nakorn 

Pathom and Samut Sakhon districts. From 2004, the minimum take-up was 0.20million m 3 per day, 

rising to 0.30million m 3 per day in 2008. CH Karnchang coordinated a THO7,200million long-term 

debt facility with three Thai banks in 1998. In 2007, Thai Tap provided 93million m 3 of water to the 

PWA, 12% up from 2006. 


Name: Thai Tap Water Supply Company Limited 

Address: 30/10 Moo 12, Buddhamonthon 5 Road, Tambol Rai Khing, 

Sam Phran District, Nakhon Pathom Province, Thailand 

Tel: +66 2811-7526 

Fax: +66 2420-6064 

Web: www.thaitap.com 

Plew Trivisvavet (Chairman) 

Sompodh Sripoom (Managing Director) 

374 


THAILAND 


EASTERN WATER RESOURCES DEVELOPMENT & MANAGEMENT PUBLIC CO LIMITED 

The Eastern Water Resources Development and Management Public Company Limited (EASTW) 

was set up in 1992 as the sole supplier of water to the eastern seaboard of Thailand. The company 

was wholly owned by the Provincial Waterworks Authority of Thailand (PWA). In 1997, after an 

increase in its capital, it was partly floated on the Stock Exchange of Thailand. EASTW is developing 

water supply services to the provinces of Chonburi, Sakaew, Rayong, Chachengsao, Chanthaburi 

and Prachinburi, all located in the most industrialised area of Thailand. Currently the water 

infrastructure in these provinces is unable to meet the demands of industrialisation. 40% of the 

company’s shares are held by the Provincial Waterworks Authority, 19% by Electricity Generating Plc 

and 5% by the Industrial Estate Authority of Thailand. 

Diversification to date has been led by the Universal Utilities Company Limited (UUC), which is 

developing BOT and O&M contracts in other districts of Thailand. UUC has gained ten contracts to 

date. These involve managing the water treatment works and distribution system, reducing water 

losses and increasing water production capacity over the concession’s life: 

Chachoengsao Water Supply Company Limited (CWS, 99% held by EASTW) supplies 51,600m 3 of 

drinking water per day to 18,000 households in the Chachoengsao Waterworks Office in 

Chacheongsao. A 25 year agreement running from 2002. 

The Bangpakong Water Supply Company Limited (BWS, 99% held) supplies 43,200m 3 of drinking 

water per day to the Bangpakong Waterworks Office in Chacheongsao under a 25 year concession 

from 2003. 

The Nakornsawan Water Supply Company Limited (NWS, 84% held) supplies 9,600m 3 of drinking 

water per day to the Nakorn Sawan Ork Waterworks Office in Nokornsawan. A 25 year agreement 

running from 2003. 

The 30 year O&M contract for Sattahip Waterworks was awarded to UUC by the Provincial 

Waterworks Authority in 2000. 11,000 households are covered. It has a 31,200m³ per day capacity 

and under the contract, UUC is to expand its capacity to 38,400m 3 per day and the water distribution 

network and has installed a THO14.5million Supervisory Control and Data Acquisition (SCADA) and 

Geographic Information System (GIS). 

UUC has a 6 year O&M contract with Egcom Tara Co., Ltd. in 2004 to operate the Ratchaburi and 

Samut Songkhram Waterworks, serving the area of Muang District and Dumnern Saduak District in 

Ratchaburi and Muang District, Samut Songkhram for a community of over 25,000 households. 

A 15 year BOT to UUC for the Si Chang island municipality’s waterworks was signed in August 2000. 

The THO55million reverse osmosis desalination plant produces 250m 3 of water per day for 1,600 

households since 2006. 

A 15 year contract for UUC for a reverse osmosis desalination plant with a capacity of 3,000m 3 of 

water per day started in 2005 and expanded in 2007 to Koh Samui PWA. 

A reverse osmosis desalination plant with a capacity of 250m 3 

municipality of Koh Lan, serving 4,000 households. 

of water per day for the island 

A 25 year BOT agreed in 2006 for Rayong Waterworks, supplying 44,000 households in the Muang 

and Baankai districts. 

The Jaopraya Surasakmontree Municipality and Bo Win Sub District Administrative Organization 

agreed a 25 year BOT in 2004 with UUC for distributing water to 9,000 households with an initial 

production capacity of 2,400m 3 per day, rising to 2,880m 3 per day. 

375 


THAILAND 


EASTERN WATER RESOURCES DEVELOPMENT & MANAGEMENT PUBLIC CO LIMITED 

Water resources have been developed in three stages in recent years. In 2005 the production 

capacity rose from 171.7m 3 per annum to 191.3m 3 per annum in (Rayong River) and to 243.1m 3 per 

annum in 2007 (Bangpakong) and to 339.1m 3 per annum in 2008 with the opening of the Prasae and 

Klongyai reservoirs. Further projects are anticipated in 2013 to meet increased demand by then. 

Wastewater management is at an earlier stage, with an O&M contract for the Hadyai Municipal 

Wastewater Treatment Plant. 

EASTW, profit and loss account 

Y/E 30/09 (THOmillion) 2003 2004 2005 2006 2007 



Net income 352.5 441.3 500.1 507.8 440.7 

Earnings per share (THO) 0.35 0.44 0.39 0.39 0.33 

Million m 3 pa 2003 2004 2005 2006 2007 

Raw water sales 178 157 190 199 211 

Tap water sales 14 21 31 39 61 

Revenues by customer type (%) 

Y/E 30/09 2003 2004 2005 2006 2007 

Raw Water 83% 68% 65% 57% 60% 

Service Income 8% 8% 5% 19% 18% 

Tap Water 8% 10% 13% 15% 19% 

Drinking Water 1% 5% 12% 1% 0% 

Pipes 1% 9% 5% 8% 3% 

Current tariffs are THO6 per m 3 for domestic and commercial use and THO9 per m 3 for industrial use. 

In July 1999, EASTW raised THO2.5billion through a bond issue to fund expansion into non-regulated 

activities and to upgrade the distribution network. EASTW anticipates spending more than 

THO3.4billion on completing its water distribution network in Rayong, Prachinburi and Chachoengsao 

provinces. 

In 2000, Electricity Generating Pcl (Egco) sold a 15% stake in Egcom Tara to East Water for 

USD2.1million. Egco is the leading Thai private sector power generation company. In July 1999, Egco 

acquired 70% of Egcom Tara from Require Construction Co for THO398million (USD11million). 

Egcom Tara has a 30 year THO690million BOT contract for water supply in Ratchaburi and Samut 

Songham provinces. EASTW has set up a partnership with VE and Aquathai Co of Thailand to bid for 

a THO800million water supply BOT for the central area of Lampang province. This consortium was 

the only group to pass PWA screening for the contract. East Water is currently negotiating with 

Egcom to acquire a majority stake in the venture. Egcom Tara also has a 10-year contract to supply 

tap water in Sattahip for the Provincial Waterworks Authority, a business that could generate longterm 

income to the company. East Water is seeking to increase its stake in Egcom Tara to 50%. 

EASTW is currently spending THO2 billion (USD44.5million) to expand its drinking water provision 

activities; first through Egcom Tara, where it plans to increase its stake and also through spending 

THO1billion in a reservoir and pipeline project in Chachoengsao province to increase its water 

capacity from 160 to 240m 3 pa. A THO2.3billion 52.5km pipeline connecting Bangpakong to 

Chonburi is being built from June 2005 and will enter service in 2007, delivering 50million m 3 pa. 

376 


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Name: Eastern Water Resources 

Development & Management Public Company Limited 

Address: 9/9 Vibhavadi Rangsit Road, 

Laksi, Bangkok, 10210 Thailand 

Tel: +66 2 940 9974-6 

Fax: +66 2 561 3793 

Web: www.eastwater.co.th 

Sujarit Patchimnum (Chairman) 

Wanchai Lawatanarakul (President and CEO) 

Thidarut Kraiprasit (SVP, Finance) 

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AECOM 

Tyco International Ltd acquired Earth Tech in 1996. Earth Tech has a turnover of approximately 

USD1.3billion in 2007. In February 2008, Earth Tech was sold to Aecom Technology Corporation for 

USD510million. Aecom is involved in a number of infrastructure markets and 80% of its 2007 

revenues derived from professional and technical services with 20% from management support 

services. It had its IPO in 2007. Tyco is retaining Earth Tech’s water and wastewater contracts in 

Australia, New Zealand and Brazil (see separate company entry). 

AECOM, profit and loss account 

Y/E 31/12 (USD million) 2004 2005 2006 2007 

Turnover 2,012 2,395 3,421 4,237 

Operating income 87 99 103 156 

Net income 50 54 54 100 

Earnings per Share (USD) 0.78 0.84 0.74 1.15 

Earth Tech operated more than 200 water and wastewater treatment facilities in the United States, 

Canada, United Kingdom, Ireland, Hungary, China, Australia, Thailand, Venezuela, and Brazil. Earth 

Tech's water and wastewater treatment facilities serve more than 10million people worldwide in 2007. 

Aecom is divesting the water and wastewater operations. It sold the Mexican activities to Mitsui of 

Japan (see company entry) and the US water contract operations to United Water (see Suez 

company entry). The Chinese contracts are currently under negotiation to Suez / New World and the 

British and Irish interests are also expected to be sold. 

Earth Tech, populations served 


Australia 0 50,000 50,000 

Brazil 180,000 300,000 300,000 

China 3,850,000 550,000 4,250,000 

United Kingdom 700,000 63,000 763,000 

Grand Total 4,730,000 963,000 5,363,000 

China 

1999 Changli 30 year ‘concession’ 150,000 water & sewerage 

2001 Guangzhou 20 year DBFO 400,000 sewage treatment 

2002 Tianjin 20 year DBFO 3,700,000 water treatment 

The Changli concession covers engineering, project management, construction, and O&M of the 

county's water supply system. The JV Company, Qing Huang Dao Pacific Water Company, is 

responsible for billing customers in Changli. Earth Tech is developing a water supply, treatment, and 

distribution system that will produce up to 60,000m 3 per day of water to serve a projected population 

of 150,000, plus a tourist population of 75,000 during peak periods at a cost of USD10million. 

In December 2001, Earth Tech started work on the Xi Lang wastewater treatment plant in 

Guangzhou. The USD120million 20 year DBFO contract is a JV. The 2 phase project will treat 

0.26million m 3 of effluent per day. The first phase will treat 0.13million m 3 of wastewater per day for 

400,000 people and serve most of the city's Fang Cun District, the largest and fastest-growing district 

in Guangzhou. It entered service in 2003 and Earth Tech will manage and operate the system for 18 

years. The second phase will provide for treatment of an additional 0.13million m 3 per day of 

wastewater. 

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A USD400million, 20 year DBFO project for the Jie Yuan Water Treatment Plant in Tianjin was 

awarded by the Tianjin Water Works Group Co to Earth Tech Jieuan Water Co Ltd in May 2002. The 

AECOM 

plant is capable of treating more than 500,000 m³ of water per day and will be comprehensively 

renovated and upgraded. 

Venezuela 

2000 Jose DBFO Industrial water & wastewater 

Aguas Industriales de Jose (AIJ) is a JV between Earth Tech (75%) and PDVSA, Venezuela’s 

national petroleum company (25%). AIJ is providing water and wastewater services to 12 

petrochemical consortiums at the Jose Industrial Complex. Earth Tech will initially invest 

USD75 million in the project. AIJ owns and operates a facility which treats and supplies industrial 

water at a rate of 112Ml/day. This facility has been upgraded to have a 260Ml/day capacity. 

Hungary 

2003 MOL 15 year industrial outsourcing Wastewater services 

The contract with MOL, the Hungarian Oil & Gas Company involves expanding, upgrading and 

managing the 23,850m 3 per day wastewater treatment facilities at the Duna refinery in 

Szazhalombatta, near Budapest. Total construction costs were USD45million and Earth Tech has 

managed the wastewater assets and services at the refinery for 15 years from June 2005. The project 

has been financed with the support of the EBRD. 


2005 Project Alpha 25 year PFI 700,000 water treatment 

Project Alpha, one of the two PFI projects for Northern Ireland concerns the building and upgrading of 

four water treatment works which will serve approximately half the population of Northern Ireland. It 

was awarded to Dalriada Water (Earth Tech 45%, Kelda 45% & Farrans 10%) and involves 

GBP10million of capex and a treatment capacity of 0.4million m 3 per day from 2008. 

2003 UK MoD 25 year PFI Water & wastewater services 

Bray Utilities, consisting of Kelda (45%), Earth Tech (Tyco International, 45%) and Kellogg Brown & 

Root (USA, 10%) gained Package A of Project Aquatrine, serving some 1,000 military sites in South 

West England, the Midlands and Wales. The contract is worth GBP1billion and operations 

commenced in December 2003. 

2001 Newry 30 year BOT 63,000 sewage treatment 

This contract is for a 30,750 m 3 per day PFI sewage treatment plant in Northern Ireland. 


Name: Aecom 

Address: 

555 South Flower Street 

Los Angeles, CA 90071-2300 

Tel: 001 213 593 8000 

Web: www.aecom.com 

Richard Newman (Chairman, Aecom) 

John M Dionisio (President & CEO, Aecom) 

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AECOM 


Name: Earth Tech 

Address: 100 West Broadway, Suite 240, Long Beach 

CA, 90802, USA 

Tel: +562 951 2000 

Fax: +562 951 2100 

Web: www.earthtech.com 

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ALLIANCE WATER RESOURCES 

Alliance Water Resources (AWR) is a privately held company (SCW) operating in Midwestern USA 

and employing 250 staff. The company was founded in 1976, and over the past 25 years, has 

operated in excess of 100 water and wastewater treatment facilities. It is the leading water services 

outsourcing company in Missouri. Currently, it serves 314,521 people through a series of O&M 

contracts in the states of Missouri and Iowa, up from 272,800 people in 2003. 

Activities by client category 

Commercial & industrial 10% 

District 30% 

Municipal 60% 

Contract services provided include water treatment (55% of clients), water distribution (68%), 

wastewater treatment and sewerage (82%), water & wastewater (55%), meter reading (55%) and 

complete services management (32%). 

Bowling Green, MO Water & wastewater (municipal, 1994-) 5,166 

Cameron, MO Wastewater (municipal, 1990-) 11,500 

Cape Girardeau, MO Water (municipal, 1992-) 37,500 

Elsberry, MO Water & wastewater (municipal, 2000-) 2,000 

Fulton, MO Water & wastewater (municipal, 1992-) 12,100 

Lake Ozak, MO Wastewater (municipal, 1999-) 10,000 

Lexington, MO Wastewater (municipal, 1993-) 5,000 

O’Fallon, MO Water & wastewater (municipal, 1993-) 60,000 

Maquoketa, Iowa Water & wastewater (municipal, 2001-) 6,100 

Tipton, Iowa Water & wastewater (municipal, 1999-) 3,155 

Parkville, MO Wastewater (municipal, 2002-) 4,000 

Buchanan Co, MO Water (district, 2001-) 2,500 

Franklin Co, MO Water & wastewater (district, 1994- & 2005-) 10,000 

Henry Co, MO Water (district, 1983- & 2002-) 13,000 

Lincoln Co. MO Water & wastewater (district, 1995-) 12,000 

Platte Co. MO Water (district, 2002-) 4,000 

Ralls Co. MO Water & wastewater (district, 2001-) 6,300 

St Charles’ Co, MO Water & wastewater (district, 1980- & 1986-) 85,000 

Troy, MO Wastewater (municipal, 2005-) 8,900 

Bonne Terre, MO Wastewater (municipal, 2005-) 6,400 

Phelps Co, MO Wastewater ( district, 2006-) 1,200 


Name: Alliance Water Resources 

Address: 206 South Keene Street 

Columbia, MO 65201 

Tel: +1 573 874-8080 

Fax: +1 573 443-0833 

Web: www.alliancewater.com 

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AMERICAN WATER WORKS 

USA – American Water Works 

American Water Works (AWW) has a considerable historic presence; one of its main subsidiaries, 

E’town Water dates back to 1854 and the American Water Works & Guarantee Company was 

founded in 1886. AWW has been seeking to create a national presence in the USA water market 

through a long-term acquisition programme that started in earnest during 1996. AWW seeks to 

concentrate on developing regional strength in water utility operation rather than merely further the 

numbers served. Thus in August 2001 AWW sold certain activities in New England to Kelda Group as 

Kelda’s Aquarion had a stronger presence in this region. 

In September 2001, American Water Works agreed to a USD4.6billion bid by RWE after rejecting a 

USD3.5billion bid in August 2001. AWW was merged with Thames Water in 2003 and renamed 

American Water. In addition, E’town Water, which was acquired by Thames in November 1999 after 

an agreed USD948million bid has been integrated within AWW. The AWW transaction was subject to 

the approval of utility regulatory commissions which was completed in January 2003. In 2006, it was 

announced that AWW would be spun off from RWE via an IPO during 2007. As part of this process, 

American Water was renamed American Water Works and RWE sold 36% of AWW’s equity on the 

NYSE in April 2008. 

AWW, profit & loss account 

Y/E 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Regulated business N/A N/A 1,836.1 1,854.6 1,987.6 

Non-regulated business N/A N/A 469.9 468.7 500.1 



Interest paid 336.8 305.0 335.7 361.5 270.6 

Net income 42.1 59.1 -275.1 -155.9 -342.3 

Earnings per share (USD) 0.26 0.37 -2.03 -1.01 -2.14 

AWW, breakdown of revenues and volumes 

Y/E 31/12 2007 Revenues Water volumes 

Residential 57.6% 52.8% 

Commercial 19.4% 21.9% 

Industrial 4.8% 10.6% 

Public & other 12.5% 14.7% 

Other water revenue 1.9% N/A 

Total Water 96.2% 100.0% 

Wastewater 3.8% N/A 

AWW has 72 regulated and non-regulated subsidiaries in the USA and Canada and provides 

wastewater services in 11 states. The 3.3million regulated customers account for 89.8% of operating 

revenues. The company anticipates capex of USD4,000-4,500 million between 2007 and 2011. 

Major acquisitions, 1996-2002 

Year Company People 

served 

Cost 

(USD million) 

Turnover 

USD million 

1996 PAWC 2,000,000 409 N/A 

1998 EHCS 35,000 17 N/A 

1999 NEI 1,700,000 700 N/A 

1999 American Anglian (50%) 1,000,000 32 31 (1999) 

2000 UWR subsidiaries 122,500 50 N/A 

2001 City of Coatesville 53,000 48 7 (2001) 

2001 Azurix North America 2,000,000 160 134 (2001) 

2002 Citizens Utilities subsidiaries 1,100,000 859 140 (2001) 

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In December 2007, the company announced that it was seeking to acquire the assets of the city of 

Trenton's water system located in Ewing, Hamilton, Hopewell and Lawrence townships. The proposed 

purchase price is USD100million. This would add 39,000 new customers. In November 2007 AWW 

acquired South Jersey Services Inc. adding 7,200 customers via the Pennsgrove Water Supply 

Company of Salem County and the South Jersey Water Supply Company of Gloucester County. 

AWW, regulated activities in 2007 

State Customers People (million) Revenues 

Pennsylvania 644,720 2.10 416.2 

New Jersey 634,957 2.59 505.3 

Missouri 465,087 1.55 179.9 

Indiana 283,088 1.26 146.5 

Illinois 306,740 1.27 179.1 

California 171,455 0.63 124.4 

West Virginia 167,744 0.58 105.6 

Others 638,847 N/A- 330.6 

Total 3,312,628 N/A- 1,987.6 

AWW had a total of 3,171,295 regulated water customers and 141,333 regulated wastewater 

customers in 2007. There are 9.98million people served in the leading seven states and an estimated 

2.4million people served in the 12 other states, or a total of 12.4million people. A further 4.2million are 

served by non regulated activities in the USA and 0.4million in Canada. 

AWW, tuck-in acquisitions, 1998-2003 

Year 

Transactions Customers Customers Total cost USD per 

completed served per deal (USD million) customer 

1996 13 N/A N/A 36.9 N/A 

1997 9 N/A N/A 2.9 N/A 

1998 22 26,770 1,785 47.2 1,756 

1999 21 14,000 666 12.4 857 

2000 12 38,000 3,167 52.1 1,368 

2001 10 20,000 2,500 56.3 2,795 

2002 9 29,000 3,625 31.9 1,100 

2003 10 N/A N/A 4.6 N/A 

2004 8 N/A N/A 1.9 N/A 

2005 7 N/A N/A 5.0 N/A 

2006 11 N/A N/A 12.5 N/A 

2007 8 N/A N/A 18.0 N/A 

After being bought by RWE, acquisitions were effectively wound down and have been revived as the 

company prepared for its partial divestment since 2006. 

Non-regulated activities: American Water Services 

American Water Services is responsible for the company’s non-regulated activities. It serves some 6 

million people and in 2002 generated revenues of USD222million through 800 contracts operating 

700 water treatment works and 300 wastewater treatment plants. 

Anglian Water Group (AWG) of the UK formed American Anglian Environmental Technologies (AAET) 

in 1993, a 50:50 JV with AWW to pursue opportunities for water and sewerage projects. AWG sold its 

stake in the JV to AWW in October 1999 for USD32million. AAET serves 1million people through 

managing 175 water and wastewater treatment facilities in seven states, with a 1999 turnover of 

USD31million. 

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In August 2001, AWW acquired all of the North American activities of Azurix from Enron for 

USD153.3million plus USD6.5million in debt. Azurix had built a broad portfolio of activities in the USA 

and Canada, including a small utility, and municipal and industrial outsourcing services, water rights 

and a web based water trading system. The latter, water2water.com is now a web site selling fish 

tanks. Azurix acquired Philip Utilities Management Corporation for USD106million in May 1999. Azurix 

North America (ANA) had a turnover of USD131.5million in 2001, serving approximately 2 million 

people, including 1.82million for water provision and 0.35million for sewerage and wastewater 

treatment services (estimated). 

Azurix contract gains in the USA (USD million) 

Date Contract Location Value Duration 

(Years) 

Annual 

revenues 

05-2000 O&M water provision Jefferson, Louisiana 30 15 2.0 

05-2000 O&M water provision Brunswick, New Jersey 120 20 6.0 

05-2000 O&M water provision Wildwood, New Jersey 71 20 3.6 

11-1999 O&M water & wastewater Gary, Indiana 10 5 2.0 

AWW’s Millitary Services Group made two major contract gains in September 2008: a contract for 

ownership, operation and maintenance of the water and the wastewater systems at Fort Polk Army 

Installation, Louisiana worth USD348million over a 50-year period and a contract for ownership, 

operation and maintenance of the water distribution system and wastewater collection system at Fort 

Hood Army Installation, Texas worth USD329million over a 50-year period. 

One other major contract gain was the 1996 USD410million contract for Pennsylvania Enterprises’ 

water systems near Scranton, Pennsylvania. AAET also manages the operation of 2 New Jersey 

systems and 15 in Indiana, most of which are for small communities. 

Canada 

American Water Services provide O&M outsourcing services Ontario. In September 2001 Azurix NA 

was awarded a 10 year contract to operate and maintain the Lake Huron and Elgin Area Primary 

Water Supply Systems in Ontario. ANA bid was priced at CAD71.2million (USD47.5million) over the 

length of the contract, a saving of approximately CAD1million pa. The contract has an option for an 

additional five years and serves a population of approximately 420,000. 


Name: American Water Works 

Address: 1025 Laurel Oak Road, Voorhees, NJ 08043, USA 

Tel: (609) 346-8200 

Fax: (609) 346-8360 

Web: www.amwater.com 

George MacKenzie (Chairman) 

Donald L. Correll (President & CEO) 

John S. Young (COO) 

Ellen C. Wolf (CFO) 

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AMERICAN STATES WATER 

American States Water (AWR) owns the Golden State Water Company (SCW), which was founded in 

1929 and floated in 1931. It is a utility company engaged principally in the purchase, production, 

distribution and sale of water. SCW operates in three regions, serving 75 communities in 10 counties 

in the state of California and provides water services in 21 customer service areas. Approximately 

73% of SCW's water customers are located in the greater metropolitan areas of Los Angeles and 

Orange County. SCW also provides electricity services to the City of Big Bear Lake and surrounding 

areas in San Bernardino County. Combined revenues derived from commercial and residential water 

customers accounted for approximately 86% and 93% of total water revenues in 2007 and 1997, 

respectively. SCW served 254,546 water customers (1 in 30 Californians) at the end of 2007. 52% of 

water requirements are met from company owned resources and the company’s immediate priority is 

to secure its longer term supplies in compliance with Californian legislation which calls for a minimum 

of 20 years of guaranteed water supplies for all new developments in the state. 

AWR is expanding through a series of local acquisitions in California and other states. In December 

1999, AWR sought to acquire Peerless Water, a company serving 1,900 customers in Bellflower, 

California. Regulatory clearance was anticipated by the end of 2001. In October 2000, AWR acquired 

Chaparral City Water Company (CCWC) from MAXXAM Inc. for USD31.2million, less outstanding 

debt. CCWC provides water to 13,500 customers in the towns of Scottsdale and Fountain City in 

Arizona. 

AWR, profit and loss account 

Y/E 31/12 (USD million) 2004 2005 2007 

Water customers: SCW 251,381 252,845 254,546 

CCWC 12,750 13,001 13,448 

Turnover: SCW 194.4 198.5 N/A 

CCWC 6.5 7.0 N/A 

ASUS 1.8 3.5 34.9 

Operating profits: SCW 52.5 54.9 N/A 

CCWC 1.3 2.1 N/A 

ASUS N/A4.9 N/A2.7 2.0 

Y/E 31/12 (USD million) 2003 2004 2005 2006 2007 

Residential & commercial 169.4 181.2 185.4 198.3 213.6 

Industrial 2.6 2.6 2.7 2.6 2.5 

Fire service 1.6 1.6 1.5 1.5 1.6 

Other water 13.8 16.3 16.1 20.4 20.2 

Contracted service revenue 1.0 1.8 5.2 16.5 34.9 

Customers 

Residential & commerecial 255,349 257,206 258,428 259,708 260,193 

Industrial 355 359 372 371 377 

Fire service 3,425 3,471 3,596 3,681 3,797 

Other 3,124 3,189 3,450 3,553 3,667 

Y/E 31/12 (USD million) 2003 2004 2005 2006 2007 

Water 187.2 200.6 205.5 222.91 237.88 

Electricity 24.5 25.6 27.2 29.27 28.57 



Interest paid -18.1 -17.9 -13.6 -18.30 -19.21 

Net income 11.9 18.5 26.8 23.08 28.03 

Earnings per share (USD) 0.78 1.18 1.57 1.33 1.61 

Dividends per share (USD) 0.88 0.89 0.90 0.91 0.96 

The company’s American States Utility Services (ASUS) was founded in 1998 and provides 

outsourcing, billing and meter reading services to a further 97,000 non-regulated customers in 

California and Arizona. This includes 33,000 customers in the city of Torrance, CA whose services 

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AMERICAN STATES WATER 

were outsourced to ASUS in 2000. ASUS is also entering the water rights market having acquired 

5,000 acre-feet of perpetual rights in the Sacramento River in 2006. 

In October 2004 ASUS started an own, operate and maintain contract for the water and wastewater 

systems at Ft. Bliss, located near the City of El Paso, Texas, through a wholly-owned subsidiary, Fort 

Bliss Water Services Company. Revenues for the contract are estimated at more than USD196million 

over its 50-year period and are subject to periodic price re-determination adjustments and 

adjustments for changes in circumstances. A similar 50 year O&M contract for water & wastewater 

services for the Andrews Air Force Base in Maryland, and Fort Story, Fort Eustis and Fort Monroe 

and the wastewater system at Fort Lee in Virginia started in February 2006, which will generate 

USD238million in revenues. These services are provided by the company’s Terrapin Utility Services 

Inc and Old Dominion Utility Services Inc. 


Name: American States Water Company 

Address: 630 East Foothill Boulevard, 

San Dimas, CA 91773, USA 

Tel: (909) 394-3600 

Fax: (909) 394-0711 

Web: www.aswater.com 

Lloyd E. Ross (Chairman) 

Floyd E. Wicks (President/CEO) 

Robert J Sprowls (SVP/CFO) 

McClellan “Bud” Harris III (SVP, AS Utility Services) 

386 


USA 


AQUA AMERICA INC 

Philadelphia Suburban Corporation was incorporated in 1968 and is the second largest investorowned 

water utility in the USA, with 951,000 customers and serving over 3million people. It changed 

its name to Aqua America (AA) in January 2004. AA owns the Philadelphia Suburban Water 

Company (PSW) and the Consumers Water Company (CWC). PSW supplies water to approximately 

426,000 residential, commercial, industrial and public customers in a service territory of 481 square 

miles in the suburban area west and north of the City of Philadelphia, serving 1.3million people 

excluding 6,000 customers served by an O&M contract. The company has subsequently expanded 

into 12 other states, which now account for 44% of revenues. 

AA, development of regulated customer base 

Year Customers 

1992 244,788 

1996 284,141 

1999 548,937 

2003 749,491 

2006 926,823 

2007 950,732 

Tuck-in acquisitions (USD million) 

Year Number Consideration Turnover added Customers 

1997 4 1.23 0.36 1,700 

1998 5 25.38 4.69 9,007 

1999 16 39.16 4.90 17,250 

2000 18 11.84 2.63 14,418 

2001 20 14.88 4.74 25,550 

2002 25 11.66 2.92 9,175 

2003 17 1.61 0.98 N/A 

2004 27 3.84 1.23 N/A 

2005 30 12.31 6.97 N/A 

2006 27 24.56 9.63 N/A 

2007 26 11.85 4.43 [1] N/A 

[1] Turnover added during the year 

USD270million has been spent on acquisitions between 1999 and 2003 and USD338million in cash 

and shares between 2003 and 2007. Since the start of 1995, PSW has acquired 200 local water 

systems and three wastewater utilities in areas adjacent to its current operations. These have added 

in excess of 120,000 customers to AA’s original activities. In March 1999, PSC acquired the CWC for 

13.01million shares, valuing the company at USD463million. CWC serves approximately 232,000 

customers (700,000 people) in service territories covering parts of Pennsylvania, Ohio, Illinois, New 

Jersey and Maine. 

Acquisitions noted in 2008 include Honesdale Consolidated Water Company (HCWC) which serves 

approximately 6,000 people in Honesdale Borough and Texas Township, Wayne County 

(USD6.7million in September), South Haven Sewer Works, Inc., a wastewater company 

(USD9.7million in August), which serves 4,000 customers in South Haven in Porter County in 

northwest Indiana and a wastewater and local irrigation system (U$1.6million in May) serving 3,000 

residents in the Fountain Lakes development in Estero, Lee County, Florida. 

Capital spending for 2007-2011 is expected to be at USD250million pa compared with USD201million 

pa for 2002-2006 and USD101million pa for 1997-2001. 

387 


USA 



Agreed bids for AquaSource, Florida Water, Heater Utilities and New York Water Service 

In July 2002, AA launched an agreed bid with DQE to purchase AquaSource. The USD190.7million 

bid was completed in July. AquaSource has approximately 130,000 customers in 600 operating 

systems along with 40,000 O&M customers. Most of these customers are in Texas, Florida (21,000 

customers), Virginia, Indiana, North Carolina, New Jersey and Missouri with a smaller number of 

customers in five other states. After arbitration, in 2004, the bid price was revised to USD178.4million. 

In June 2004 AA acquired Allete’s North Carolina-based water and wastewater systems, Heater 

Utilities, Inc., for USD48million in cash and USD28million in debt. Heater Utilities was formed in 1964 

and had revenues of USD19.5million in 2003. Heater Utilities serves 50,000 customers, 45,000 for 

water and 5,000 for wastewater services through 245 water and 15 wastewater systems. In July 

2004, AA completed the acquisition of 63 water and wastewater systems from Allete’s Florida Water 

Services Corporation for a total of USD14.7million. 

In January 2007 AA acquired New York Water Service Corporation for USD26.6million and 

USD23million in debt. New York Water Service Corporation provides water service to 44,792 

customers in several water systems located in Nassau County, Long Island, New York. 

The agreed bid for Pennichuck in May 2002 was terminated in February 2003 when a referendum in 

Nashua, New Hampshire sought to authorise the municipal acquisition of Pennichuck. 

AA, geographical split of turnover 

YE 31/12 Revenues Customers 

Pennsylvania 279.7 438,000 

Ohio 39.9 84,000 

Illinois 35.3 70,000 

Texas 38.0 N/A 

New Jersey 22.6 150,000 

Virginia 8.3 70,000 

Florida 15.3 117,000 

Indiana 16.9 38,000 

Maine 9.4 16,000 

Missouri N/A 3,750 

New York N/A 48,000 

North Carolina 29.8 8,500 

Revenues are for 2005 and customers are for 2007. 

Other states include Maine (16,900 customers), Indiana (1,500 customers), Missouri (4,000 

customers) and North Carolina (25,000 customers). These figures are for the final quarter of 2003, 

and reflect the contribution made by AquaSource’s activities. 

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USA 



AA, profit and loss account (including the CWC acquisition) 

Y/E 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Residential 218.49 264.91 295.47 317.77 360.54 

Commercial 61.34 65.61 73.46 76.08 85.55 

Industrial 17.68 17.38 18.36 18.75 19.55 

Other water 40.05 44.59 50.83 51.26 58.27 

Wastewater 17.87 35.93 42.18 48.91 52.89 

Other revenues 9.82 11.56 13.16 13.53 12.94 


Net income 70.79 80.01 91.16 92.00 95.01 


(USD) 

Metered customers 

Residential 624,355 702,367 724,954 780,828 797,899 

Commercial 33,015 33,720 33,975 36,280 37,056 

Industrial 1,397 1,365 1,356 1,337 1,322 

Other 20,483 15,700 15,584 15,587 16,683 

Wastewater 70,421 82,360 89,025 92,791 97,772 

Total – regulated 749,491 835,512 864,894 926,823 950,732 

Condemnations 

In December 2002, as a result of the settlement of a condemnation action, the Ohio operations were 

sold to Ashtabula County for USD12.2million, with a net after-tax gain of USD3.7million. AA is 

continuing to operate this water system for Ashtabula County under a 1 year operating contract that 

should provide over USD300,000 in operating revenues in 2003. Other sales have been for peripheral 

operations in Kentucky and Connecticut (some peripheral Aquasource activities) while the Fort 

Wayne (Aquasource) activities were sold to the municipality for USD16.9million under eminent 

domain in February 2008. 


Name: Aqua America Inc 

Address: 762 Lancaster Avenue, 

Bryn Mawr, PA 19010, USA 

Tel: +1 610 525 1400 

Fax: +1 610 645 1061 

Web: www.aquaamerica.com 

Nicholas DeBenedictis (Chairman/President/CEO) 

David P. Smeltzer (SVP - Finance/CFO) 

Christopher H. Franklin (Regional President, AA Southern Operations) 

Karl M. Kyriss (Regional President, AA Mid-Atlantic Operations) 

Robert G. Liptak (Regional President, AA Northern Operations) 

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USA 


ARTESIAN RESOURCES CORPORATION 

Artesian Resources Corporation (ARC) is the parent holding company of Artesian Water Company, 

Inc. (AWC). AWC was founded in 1927 as the successor to the Richardson Park Water Company, 

founded in 1905. In 1984, the company was renamed Artesian Resources Corporation and the utility 

assets were vested to a newly formed subsidiary, Artesian Water. In 2007, Artesian had 75,100 

metered water customers (68,049 in 2002) and 414 metered wastewater customers (none before 

2005) and served a population of approximately 250,000, representing approximately 29% of 

Delaware's total population, a 32% increase since 1991). Artesian also has 39 customers in 

Pennsylvania, which will be augmented by four developments serving 350 customers. . 

Since 1993, Artesian has added to its service territory by acquiring exclusive service areas in 

Delaware. This expansion, which has occurred in southern New Castle, Kent and Sussex Counties, 

has increased the exclusive service area in Delaware by approximately 40% since 1993. In 1998, 

ARC acquired the rights to provide water to two municipalities and neighbouring developments in 

Sussex County serving some 10,000 new customers from 2005. This area has accounted for 38% of 

ARC’s customer growth since 1998. Facilities serving 4,400 customers in these areas are currently 

being developed. Artesian also entered into agreements in 1998 to supply water to two municipalities 

in New Castle County. In 2003, residents in Broad Run Ridge, Pennsylvania were connected to the 

Delaware system. The company has also identified a number of wastewater treatment opportunities. 

Artesian Water, revenue by customer class 

Revenue by customer class 2003 2004 2005 2006 2007 

Residential 59.83% 59.07% 57.05% 55.8% 57.6% 

Commercial 24.00% 23.66% 22.61% 22.2% 22.3% 

Industrial 0.88% 0.79% 0.63% 0.8% 0.7% 

Government and other 12.17% 12.45% 11.66% 12.3% 11.7% 

Other water revenues 2.05% 2.19% 2.37% 2.6% 3.2% 

Non-utility operating revenues 1.07% 1.84% 5.68% 3.6% 4.5% 

Number of customers 69,726 70,993 72,383 73,800 75,514 

Artesian Water Maryland and Artesian Wastewater Maryland were established in 2007 to provide 

regulated water and wastewater services in the state. 141 water customers in Cecil County were 

added in August 2007. Artesian Wastewater (AW) was created in 1996 as a non-regulated subsidiary 

to provide wastewater treatment services in Delaware. Services started in 2005 and the company had 

414 customers in six communities in the state in 2007. Artesian Utility specialises in non-regulated 

operates two wastewater treatment plants serving 10,000 customers in Middletown entered service in 

2002. These contracts have a 20 year term, which can be extended by an additional 20 years. 

ARC, profit and loss account 

Y/E 31/12 (USDmillion) 2003 2004 2005 2007 2007 

Turnover 36.30 39.58 45.29 48.59 52.22 


Net income 3.92 4.40 5.04 6.07 6.26 


Dividends per share 0.53 0.55 0.58 0.61 0.66 

(USD) 


Name: Artesian Resources Corporation 

Address: 664 Churchman’s Road, Newark, DE 19702 

Tel: (302) 453-6900 

Fax: (302) 453-5800 

Web: www.artesianwater.com 

Dian C. Taylor (Chairman/President/CEO) 

David B. Spacht (Vice President/CFO/Treasurer) 

390 


USA 


CADIZ INC 

Cadiz Inc (Cadiz) is involved in the development of water and agricultural resources, as well as 

selected water-related technologies. Cadiz has created a portfolio of assets encompassing 

undeveloped land with groundwater resources in central and southern California with secure and 

reliable water rights that are situated near to the state’s aqueduct system. In 1996, Cadiz acquired 

Sun World International Inc (Sun World), one of the largest agricultural companies in California. The 

company holds 34,500 acres in the Cadiz Program area along with 9,000 acres in Piute Valley and 

1,800 acres in Danby Dry Lake. The latter two are supplementary to its main programme. 

In 1997, Cadiz entered into an interim agreement with the Metropolitan Water District (MWD) of 

southern California to develop a 50 year agreement for the Cadiz Groundwater Storage and Dry-Year 

Supply Program. The Program will enhance southern California’s water supply reliability by providing 

a new dry-year water supply and new storage capacity. The infrastructure for the water transfer will 

cost USD150million (over the contract period) and will allow the district to store up to 500,000 acrefeet 

of water in wet years and to transfer up to 1.1million acre feet from Cadiz’s holdings during dry 

years. The first 400,000 acre-feet will be purchased by the MWD for USD92million. The total value of 

the contract has been estimated at USD1billion. An agreement drawn up in 1993 with the San 

Bernardino County Board of Supervisors allows for the withdrawal of more than 1million acre-feet of 

groundwater from the Company's underground water basin. In August 2002, the US Department of 

the Interior supported the proposals, but in October 2002, the MWD’s final vote rejected the waterstorage 

project and no subsequent progress has been made. Claims against the MWD for 

compensatory and punitive damages were filed in November 2005. Further hearings too place 

between 2006 and 2008. In August 2008, the MWD announced that mandatory water rationing would 

be considered from 2009 in the wake of continuing shortages and reduced allocations. 

In September 2008 Cadiz announced a 99 year lease with the Arizona and California Railroad 

Company for conveying water to the Colorado River Aqueduct. Although more expensive, this will 

obviate the environmental concerns arising from the original conveyancing project. 

Cadiz Inc., profit and loss account 

Y/E 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Turnover – Sun World 2.86 0.00 0.00 0.00 0.00 

Turnover - other 0.30 0.05 1.20 0.61 0.43 


Net income -14.05 -16.04 -23.03 -13.83 -13.63 

Earnings per share (USD) -6.39 -2.32 -2.14 -1.21 -1.15 

In January 2003, Sun World was placed under Chapter 11 protection because of the need to 

refinance some USD40million in debt. Sun World’s assets were sold in 2005. The company has 

raised USD35million from private placements in 2003 and 2004, along with a refinancing of its 

corporate debt in order to pursue the development of its water rights portfolio. 


Name: Cadiz Inc 

Address: 550 South Hope Street, Suite 2850, 

Los Angeles, CA 90071 USA 

Tel: +1 213 271 1600 

Fax: +1 213 271 1614 

Web: www.cadizinc.com 

Richard Stoddard (CEO) 

Mark A Liggett (Senior Vice President) 

391 


USA 


CALIFORNIA WATER SERVICE CO. 

The California Water Service Company (CWSC) was formed in 1926, and was transformed into a 

holding company in 1997. The company is the largest investor-owned water company in California 

and the fourth largest in the USA, serving 2million people with water and wastewater and providing 

water meter reading for a further 175,000. Since 2000, customer gains have been running at 5,000- 

7,500 per annum. CWSC provides water and wastewater services to 487,600 residential, commercial 

and industrial customers in regulated contracts in California, New Mexico, Washington and Hawaii 

and 107,700 customers through unregulated water activities. Regulated customers generated 

revenues of USD753 each in 2007 against USD692 in 2006. These regulated contracts are mainly in 

the San Francisco Bay, Sacramento Valley, Salinas Valley, San Joaquin Valley and Los Angeles. 

Due to the shortage of water in its operating area, 51% of water supplied by the company was 

purchased from third parties in 2007. 

Customer base, 2008 

[Non-regulated customers are for 2005] 

California New Mexico Washington Hawaii Total 

Regulated 463,600 7,500 15,800 3,770 490,670 

Regulated – sewerage 0 1,700 0 0 1,700 

O&M 35,300 0 3,900 0 39,200 

15 year lease 6,100 0 0 0 6,100 

Meter reading 13,400 49,000 0 0 62,400 

Total 511,500 57,180 19,211 3,770 600,070 

Rio Grande Utilities Corporation (Rio Grande) was acquired in 2001 (approval gained in 2002) for 

USD2.3million, with USD3.1million in assumed debt. Rio Grande has annual revenues of 

USD1.2million. In May 2000, CWSC merged with Dominguez Services Corporation (DSC), a water 

provision company serving 150,000 people in the Los Angeles area. DSC’s main holding is the 

Dominguez Water Company (32,637 customers, 120,000 people in 18 communities in the 

Carson/Torrance area of Los Angeles County), along with 3 smaller subsidiaries; the Kern River 

Valley Water Company (1,271 customers), the Antelope Valley Water Company (4,096 customers) 

and Redwood Valley Water Company (1,912 customers). In addition, DSC Investments generates 

revenues from the transfer of water rights between third parties. DSC had revenues of 

USD28.5million in 1999. In May 2003, CWSC acquired Kaanapali Water Corporation, now renamed 

Hawaii Water, which provides water service to 1,500 customers on the island of Maui, including 

several large resorts and condominium complexes, 500 customers from the original acquisition and 

approximately 1,000 from acquisitions and developments on Maui and Big Island. 

Non regulated revenues were USD13.56million in 2007, with operating profits of USD4.44million. 

Non-regulated revenues were USD9.26million in 2005, with operating profits of USD 2.98million. 

California Water Service Co., profit and loss account 

Y/E 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Residential 194.90 221.32 222.63 232.81 253.75 

Business 49.67 55.80 56.96 60.37 65.46 

Industrial 11.26 13.59 14.24 16.29 17.40 

Public authorities 12.79 15.12 14.97 15.73 17.95 

Other customers 8.52 9.73 11.93 9.53 12.53 


Net income 19.42 26.03 27.22 25.58 31.16 


(USD) 

Dividend per share 1.13 1.13 1.14 1.15 1.16 

(USD) 

392 


USA 


CALIFORNIA WATER SERVICE CO. 

In September 2008, Hawaii Water acquired Waikoloa Resort Utilities, Inc., Waikoloa Water Company, 

Inc., and Waikoloa Sanitary Sewer Company, Inc. (West Hawaii Utilities). West Hawaii Utilities serves 

1,970 customers in homes, condominiums, hotels, golf courses, and shops at Waikoloa Beach Resort 

and in Waikoloa Village in Big Island. 


Name: California Water Service Group 

Address: 1720 North First Street, 

San Jose, CA 95112 USA 

Tel: +1 408 367 8200 

Fax: +1 831 427 9185 

Web: www.calwater.com 

Web: www.dominguezh2o.com / www.calwatergroup.com 

Robert W. Foy (Chairman) 

Peter C. Nelson (President/CEO) 

Martin A. Kropelnicki (CFO) 

393 


USA 


CH2M HILL 

CH2M Hill is an employee-owned civil engineering company. It was founded in 1946 by Messrs 

Cornell, Howland, Hayes & Merryfield who in turn merged with Claire A Hill Associates in 1971. The 

company employs 14,400 staff. In Puerto Rico, CH2M Hill was involved in the design and upgrading 

or construction of 600 water and wastewater facilities as part of a USD2.1billion investment 

completed by 2003. Other international projects include advanced effluent treatment at a number of 

coastal cities in Australia and New Zealand. In 2007, the company had revenues of USD5.8billion 

compared with USD3.8billion in 2005. 

Operations Management International (CH2M Hill OMI) 

As the name suggests, CH2M Hill OMI specialises in water and wastewater O&M contracts for 

municipal and industrial clients. The company was founded by CH2M Hill in 1980. Its first O&M 

contract was awarded by Lebanon, Oregon in 1982 and this was renewed for a further 10 years in 

2007. OMI currently operates 200 water and wastewater facilities, against 150 in 1999 and has 1,600 

staff. It is estimated that the company serves 3.5million people and is the fourth largest municipal 

O&M player in the USA, with revenues of USD181million in 2005. In addition, CH2M Hill OMI serves a 

number of industrial clients, generating revenues of approximately USD30million pa. The company is 

currently active in 30 states in the USA and in Canada and Puerto Rico. 

OMI – some major contracts 

2001 Seattle, WA 25 year DBO Water treatment 

2002 Sandy, Oregon 5 year O&M Wastewater treatment 

2002 Genoa, Michigan 3 year O&M Water & wastewater treatment 

2002 Rio Rancho, NM 5 year O&M Water & wastewater treatment 

2002 Stockton, CA 20 year O&M Water & wastewater treatment 

2003 Havana, Florida 3 year O&M Wastewater treatment 

2003 Fort Campbell, KY 50 year O, O&M Water & wastewater treatment 

2004 [1] Eldorado, NM 4+4 year O&M Water treatment 

2005 Clovia, CA 15 year DBO Wastewater treatment & reuse 

2007 [1] Lebanon, Ore 10 year O&M Water & municipal services 

2008 [1] Grants, NM 20 year O&M Water & wastewater treatment 

2008 [1] Prescott Valley, AZ 5 year O&M Water & wastewater treatment 

[1] Contract renewals 

The Fort Campbell contract covers all the ownership and all operations for the 101 st Airborne 

Division’s headquarters, covering 3,000 buildings and 4,000 housing units, with a 7.6million gallon per 

day water treatment plant and a 4million gallons per day wastewater treatment plant. The total 

contract is worth USD700million. In Seattle, the new Cedar Treatment Facility will provide 70% of the 

water used by the city’s 1.3million people and will save Seattle USD50million over the life of the 

contract. The water treatment facility is expected to be operating by the end of 2004 and will cost 

USD109million to design, build and operate for 25 years. The Stockton contract was originally 

awarded to OMI’s joint venture with Thames Water and is intended to save the city USD65million in 

engineering fees and USD110million in other operational costs. 


Name: CH2M Hill 

Address: 9191 South Jamaica Street, 

Englewood CO, 80112, USA 

Tel: (303) 771 0900 

Fax: (303) 286 9250 

Web: www.ch2m.com 

Web: www.omiinc.com 

Ralph R. Peterson (Chairman and CEO) 

Lee A McIntire (President & COO) 

Mark Lasswell (President, Water Business Group) 

394 


USA 


CONNECTICUT WATER SERVICE COMPANY 

The Connecticut Water Service Company (CWS) was founded in 1956 as Suburban Water Service, 

Inc and has concentrated on acquiring and operating water companies through controlling stock 

ownership. The oldest system in CWS’s franchise was formed in 1849. Since 1969, the company has 

been selling off its excess real estate holdings. In 1975, the company changed its name to 

Connecticut Water Service Inc., after acquiring all of the outstanding Common Stock of CWS. In 1999 

CWS established Connecticut Water Utility Services (CWUS) to handle the non-regulated business 

activities previously transacted by CWS, its regulated subsidiary. 9% of revenues in 2005 were 

derived from the non-regulated activities. CWS was subsequently renamed New England Water Utility 

Services (NEWUS). 

FY 2003 activities by operating company (USDmillion) 

Water Company Customers People served Revenues 

Connecticut 70,714 241,000 39.01 

Unionville 5,999 20,000 2.58 

Crystal 5,050 17,000 2.07 

CWS supplies water to 86,000 customers in 2007, against 87,676 in 2004. 90% of customers are 

residential, 7% industrial and commercial and 3% other customers. These are based in three 

separate operating regions including 54 towns in Connecticut. The service areas have a total 

population of 300,000. In 1999 CWS acquired Gallup Water Service Inc., and Crystal Water Utilities 

Corporation. These two systems were merged as the Crystal Water Company of Danielson in 2005. 

In December 2001, the company made a USD6.3million agreed bid for Unionville Water, a CT based 

company with 5,400 customers or 14,000 people at the time. 

In July 2008, the company acquired the Ellington Acres Company which serves 750 customers (2,300 

people) in Ellington, CT. The acquisition cost USD1.495million and links to the 36,000 customers 

already served in the vicinity by the company. 

In January 2008, the company acquired Birmingham Utilities’ Eastern Operations, which serve 2,200 

customers (7,500 people) in 15 towns in the state for USD3.5million. The activities are expected to 

generate revenues of USD1.6million pa. Two small acquisitions completed in 2007 (Avery Heights 

and the Hilldale Park Homeowner’s Association) added a further 300 connections (1,000 people) to 

the company’s activities in CT. 

Connecticut Water Service Co., profit and loss account 

Y/E 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Turnover 

Residential 27.83 28.95 29.98 29.07 38.35 

Commercial 5.33 5.44 5.62 5.65 6.76 

Industrial 1.62 1.63 1.54 1.59 1.76 

Public Authorities 1.30 1.24 1.63 1.51 1.92 

Fire & Non-Metered 8.052 8.49 8.67 9.13 10.22 


Utility operating profits 11.68 11.04 10.54 7.53 13.25 

Net income 8.89 9.16 7.17 6.71 8.78 


Dividends per share 0.83 0.84 0.85 0.86 0.87 

(USD) 

In February 2001, CWS acquired Barnstable Holding Company for USD6.5million. Barnstable owns 

the Barnstable Water Company, which serves 7,200 customers in Barnstable, Massachusetts. In 

2005, the town of Barnstable acquired this system and allied real estate for USD11million under the 

terms of its original charter agreed in 1911. 

395 


USA 


CONNECTICUT WATER SERVICE COMPANY 

The New England Water Utility Services, Inc. (NEWUS), provides water and wastewater related 

services to residential, commercial, industrial and municipal clients throughout Connecticut, 

Massachusetts, and Rhode Island. Services include: Contract operation of water and wastewater 

systems for other utilities, businesses, municipalities, and the University of Connecticut’s Storrs 

Campus and emergency water delivery to hospitals, businesses and private well owners via tanker 

truck. 


Name: Connecticut Water Service 

Address: 93 West Main Street, 

Clinton, CT 06413 

Tel: +1 860 669 8636 

Fax: +1 860 669 9326 

Web: www.ctwater.com 

Eric W Thornburg (Chairman, President and CEO) 

David C. Benoit (VP Finance/Treasurer) 

Terrance O'Neill (VP Operations) 

396 


USA 


COVANTA HOLDING CORP 

Covanta had a series of water and wastewater contracts in New York State, Alabama and Florida. In 

April 2002, the company filed for Chapter 11 protection. CE (Covanta Energy) has withdrawn from a 

number of loss making project areas to concentrate on renewable energy generation and water 

provision. In December 2003, an agreed bid from Danielson Holding Corporation was agreed as a 

way of releasing Covanta from Chapter 11 status. This plan was accepted by the Bankruptcy Court in 

March 2004 and in September 2005, the company was renamed Covanta Holdings. Its main activity 

now is in the operation of waste to energy facilities. 

Covanta Holding Corp, profit and loss account 

Y/E 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Revenue 41.1 576.2 978.8 1,268.5 1,433.1 

Operating profit -14.3 76.9 146.2 226.8 236.6 

Pre-tax profit -14.3 35.5 77.6 122.2 148.0 

Net income -69.2 34.1 59.3 105.8 130.5 

Earnings per Share (USD) -1.05 0.37 0.46 0.72 0.85 

Prior to 2004, CW (Covanta Water) had O&M contracts serving six municipalities in New York State 

with a total treatment capacity of 17million gallons per day and a 50million gallons per day wastewater 

facility for Bristol Meyer Squibb. The main contract, for a 10million gallon per day wastewater 

treatment facility, was awarded in 1994 and renewed for 10 years in 1999. These contracts were 

handed back to their clients as part of the reorganisation procedures during 2003-04. 

Tampa Bay 

In 2000, the company was awarded a 20 year operating contract for the facility. In Tampa Bay, 

Florida, Covanta and Poseidon constructed a USD74million 25million gallons per day desalination 

facility. This facility was completed in 2003, but soon ran into a series of operational and financial 

difficulties. When the facility emerged from the various bankruptcy proceedings, it was bought out by 

the Southwest Florida Water Management District and operations were assumed by American Water 

– Pridesa. 

Bessemer, Alabama 

Bessemer Covanta has developed a USD56million 24million gallons per day water treatment facility 

serving a suburb of Birmingham, Alabama in 1997. It entered service in 1999 under a 20 year 

contract. Covanta is paid a fixed-fee plus pass-through costs for delivering processed water to a 

municipal water distribution system. 


Name: Covanta Holdings Corporation 

Address: 40 Lane Road, 

Fairfield NJ 07004, USA 

Tel: + 973 882 9000 

Web: www.covantaenergy.com 

Samuel Zell (Chairman) 

Anthony J Orlando (President and CEO) 

Craig Albot (CFO) 

397 


USA 


HAN’S TECHNOLOGIES INC 

Hans Technologies is a privately held USA based company, which has gained a series of BOT 

contracts in China through its Western Water subsidiary since 2004. The company has been 

developing engineering projects in China since 1998, with a total treatment capacity of 1.0m 3 per day 

having been installed to date. 

2004 Bijie BOT 80,000, water 

A 75,000m 3 per day WTW and 30 miles of piping was built between 2004 and 2006 to serve Qian-Xi, 

Bijie Prefecture in Guizhou. It entered service in September 2006. 

2004 Na-yong BOT 50,000, water 

A 25,000m 3 per day WTW and 10 miles of piping was built between 2004 and 2005 to serve the town 

in Guizhou. The BOT was later sold back to the government. 

2004 Zhi-jin BOT 70,000, water 

A 22,500m 3 per day WTW was built between 2004 and 2005 to serve the town in Guizhou. It entered 

service in 2005. 

2005 He-zhang BOT 50,000, water 

A 15,000m 3 per day WTW was added to the extant WTW along with seven miles of piping to serve 

the city in Guizhou. It entered service in October 2007. 

2005 Da-fang BOT 80,000, water 

A WTW, new piping and a dam are being built between 2005 and 2010 to overhaul the county in 

Guizhou’s water services. They currently serve 25% of the population. 

2005 Xi-tang 30 year BOT 100,000, wastewater 

A 75,000m 3 per day WWTW that can be doubled in size entered service in July 2007, serving the 

town and industries in Guizhou. 

2008 Yiliang BOT Wastewater 

A 20,000m 3 per day WWTW is to serve the Huaxing Water Town in Yiliang County, Kunming, Yunan. 

2008 Ninghua BOT 150,000, wastewater 

A 40,000m 3 per day WWTW is to serve Ninghua County, Sanming Prefecture in Fujian Province. 

Construction started in August 2008. 


Name: Han’s Technologies 

Address: 1300 Clay Street, Suite 600, 

Oakland C 94612 

Tel: +1 510 464 8018 

Fax: +1 510 464 8001 

Web: www.hanstech.net 

James Li (CFO) 

398 


USA 


GLOBAL WATER RESOURCES 

Global Water Resources, Inc. is a regulated water utility that provides water, wastewater and recycled 

water utility services. The Company owns and operates 16 water and wastewater utilities in 

metropolitan Phoenix, Arizona. It serves 38,000 customers (110,000 people) in a 378 square mile 

service areas. At the start of 2005, the company served 20,000 people. In May 2008, the company 

filed a registration statement for an IPO on the NASDAQ Global Select Market. It appears that the 

IPO has been held back due to market conditions. 

The company opened a groundwater recharge facility in February 2007, which is permitted for 50,000 

acre-feet of recharge per year and has started operating at 25,000 acre-feet per year. The facility is 

adjacent to the Central Arizona Project canal and the Hassayampa River. Colorado River water is 

extracted from the canal and introduced to the bed of the Hassayampa River where it recharges the 

underlying aquifer. 

In June 2005 the company acquired Sonoran Utilities Services, LLC in the City of Maricopa, adjacent 

to the companys’s Santa Cruz Water Company and Palo Verde Utilities Company. The City of 

Maricopa has seen over 600 building permits requested each month, fitting in with GWR’s plans to 

add over 300 customers a month in the area. The Cave Creek Water Company, which operates 

utilities in the Phoenix area was acquired in March 2005. 

In July 2006 Global Water Resources acquired West Maricopa Combine, the parent company of 

Valencia Water Company in the City of Buckeye, Willow Valley Water Company near Bullhead City, 

Water Utility of Greater Buckeye near Buckeye, Water Utility of Greater Tonopah west of the 

Hassayampa River and Water Utility of Northern Scottsdale located in northeast Scottsdale. These 

companies serve an area of 80 square miles, earmarked for 135,000 houses. 

In October 2007 Global Water Resources acquired Balterra Sewer Corp., a wastewater provider for 

an area in unincorporated western Maricopa County known as Tonopah. The Water Utility of Greater 

Tonopah (“WUGT”), a Global Water affiliate, is currently the area’s primary water supplier. 

In September 2008, Global Water Resources announced that it had entered into a Memorandum of 

Understanding with the City of Eloy in Arizona for the provision of water, wastewater and recycled 

water infrastructure for the eastern portion of Eloy’s planning area. 


Name: Global Water Resources LLC 

Address: 21410 N 19th Avenue, Suite 201 

Phoenix, AZ 85027 

Tel: 623-518-4000 

Fax: 623-518-4100 

Web: www.gwresources.com 

Trevor Hill (President & CEO) 

399 


USA 


MIDDLESEX WATER COMPANY 

Middlesex Water Company (MWC) is involved in wholesale and retail water supply for domestic, 

commercial, industrial and fire protection customers in New Jersey and Delaware, (with New Jersey 

being the main market). The company was incorporated in 1897 and operates water utility systems in 

central and southern New Jersey and in Delaware, as well as a wastewater utility in southern New 

Jersey. MWC serves approximately 375,000 people with water and 10,000 people with sewerage. 

The Middlesex System in central New Jersey produced 69% of the MWC's 2005 revenues, providing 

water to 59,400 retail customers, primarily in eastern Middlesex County, New Jersey, a population of 

303,000. 7% of the Middlesex System’s water was purchased from E’Town Water. The remaining 

23% was obtained through groundwater. There are seven further subsidiaries: 

1 Tidewater Utilities Inc.; Founded in 1964, serving 31,600 retail customers in 271 separate 

community water systems in Kent, Sussex and New Castle Counties, Delaware, along with 5,100 

water and wastewater customers served by White Marsh through 62 O&M contracts. 

2 Pinelands Water Company services 2,400 residential customers in Burlington County, New Jersey. 

3 Pinelands Wastewater Company services 2,300 primarily residential retail customers and, under 

contract, one municipal wastewater system in Burlington County, New Jersey with about 200 

residential customers. 

4 Utility Service Affiliates Inc, along with MWC, started a 5 year contract with the City of South 

Amboy, New Jersey to operate and maintain the city's 2,600 customer water system in May 1995. 

The contract has been renewed to 2045. 

5 Utility Service Affiliates (Perth Amboy) Inc, along with MWC, signed an agreement in 1998 with the 

city of Perth Amboy to operate and maintain the City's water and wastewater systems for its 9,300 

customers (40,000 people) for 20 years. USA-PA will be paid a fixed fee and a variable fee based on 

increased system billings. 

6 Bayview has 300 customers in Cumberland County, NJ. Bayview was incorporated into the 

Middlesex system at the start of 2006. 

7 In September 2008, the water and wastewater systems serving 1,500 people in the Blue Ridge 

Moiuntain Estates in North Carolina were taken over. 

Middlesex Water Co., turnover by activity (USDmillion) 

2003 2004 2005 2006 2007 

Residential 25.27 28.32 31.29 34.58 38.79 

Commercial 6.30 6.77 7.30 8.11 8.39 

Industrial 7.13 7.71 8.18 8.66 8.51 

Fire protection 6.83 7.34 7.74 8.64 8.88 

Contract sales 8.46 9.09 10.02 9.94 10.75 

Contract operations 8.07 7.93 8.08 8.88 8.83 

Other 2.06 3.83 2.00 2.26 1.99 

Middlesex Water Co., profit and loss account 

Y/E 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Turnover 64.11 70.99 74.61 81.06 86.11 


Net income 6.63 8.45 8.48 10.04 11.84 


(USD) 

400 


USA 


MIDDLESEX WATER COMPANY 


Name: Middlesex Water Company 

Address: 1500 Ronson Road, Iselin, 

NJ 08830 USA 

Tel: +1 732 634 1500 

Fax: +1 732 750 5981 

Web: www.middlesexwater.com 

J Richard Tompkins (Chairman) 

Dennis W Doll (President and CEO) 

A. Bruce O'Connor (VP/CFO) 

Ronald F Williams (VP/COO) 

401 


USA 


PENNICHUCK CORPORATION 

Pennichuck Corporation (PC) owns three subsidiaries operating in southern and central New 

Hampshire. Pennichuck Water Works Inc. (Pennichuck), Pennichuck East Utility Inc. (Pennichuck 

East) and Pittsfield Aqueduct Company Inc (Pittsfield), provide drinking water to 30,032 residential 

and 2,000 commercial and industrial customers. The company was founded in 1983 to operate the 

assets of Pennichuck Water Works, which was first established in 1852. Pennichuck East & Pittsfield 

were both acquired in 1998. In January 2005 three water systems were acquired: the Locke Lake 

water system in Barnstead, the Birch Hill water system in Conway and the Sunrise Estates water 

system in Middleton. When the acquisitions have been approved, they will be incorporated into the 

Pittsfield operations. In addition, the Pennichuck Water Services Corporation provides O&M services 

to Hudson, New Hampshire. Overall, PC serves 130,000 customers in 23 towns and cities in New 

Hampshire. Pennichuck East gained 146 new customers from the acquisition of three small systems 

in 2007 and a further 48 connections were acquired in the Windham part of the Pennichuck East area 

in May 2008. 

Pennichuck Corporation breakdown 

FY 31/12/2007 (USDmillion) Customers Revenues 

Pennichuck Water 25,800 21.8 

Pennichuck East 5,313 4.7 

Pittsfield 1,755 0.8 

Non-regulated water contract operations generated revenues of USD2.05million in 2005, against 

USD1.93million in 2004. The principal contracts gained to date have been for Hudson, New 

Hampshire (contract awarded 1998, renewed in 2005), Salisbury, Massachusetts (awarded 2001, and 

re-awarded in September 2007 to 2012, serving 9,000 people) and Barnstable, Massachusetts 

(commencing in 2006). 

Pennichuck Corp., profit and loss account 

Y/E 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Turnover – Utilities 18.68 19.60 21.55 21.97 27.22 

Turnover – Water management 1.70 1.93 2.05 2.33 2.29 

Turnover – Other 0.58 1.36 0.26 0.17 0.03 

Turnover 20.97 22.89 23.86 24.48 29.94 

Net income 1.25 1.82 0.48 0.57 3.58 


Aborted bid by PSC and Municipal counter-bid 

Philadelphia Suburban Corp (now Aqua America) made an agreed bid for Pennichuck in May 2002. 

The bid was abandoned in February 2003 when a referendum in Nashua, New Hampshire sought to 

authorise the municipal acquisition of Pennichuck. This process is still ongoing (at a cost to the town 

forecast by 2007 at USD4million) and in April 2004 Pennichuck started a legal action claiming 

USD5million in damages over this, with costs to the end of 2007 estimated at USD7.0million. In May 

2003, the town of Pittsfield voted to seek to acquire the Pittsfield Aqueduct Co, which was acquired by 

Pennichuck in 1998. Various hearings were held through 2007 without any progress being made by 

either side. In July 2008, the New Hampshire Public Utilities Commission announced that the city 

could acquire the system for USD243million, but the bid remains unresolved. 


Name: Pennichuck Corporation 

Address: Four Water Street, Nashua, NH 03061, USA 

Tel: +1 603 882 5191 

Fax: +1 603 882 4125 

Web: www.pennichuck.com 

Duane C Montopoli (President and CEO) 

Thomas C Leopard (VP, Treasurer and CFO) 

402 


USA 


PICO HOLDINGS INC 

The Physicians Insurance Company of Ohio (PICO) is a holding company specialising in the 

acquisition of apparently undervalued assets. The company seeks to develop a portfolio of water 

assets for sale to municipal and industrial clients. 

PICO Holdings Inc, profit and loss account 

Y/E 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Turnover 31.50 22.12 142.11 82.72 33.93 

Operating profit -13.62 -10.64 40.33 50.87 2.01 

Net profit -3.24 -10.56 16.20 29.24 -1.27 

Earnings per share -0.26 -0.85 1.25 1.95 -0.07 

(USD) 

PICO entered the water rights market in 1995 through the acquisition of Vidler Water Co. Currently, 

Vidler controls water rights in Nevada (11,306 acre-feet plus applications for up to 100,000 acre-feet 

outstanding), Arizona (37,795 acre-feet plus 13,764 acre-feet under option) and Colorado (268 acrefeet, 

these operations are in the process of being sold off). Revenues are generated by the sale of 

land and water rights and from the selling of water to third parties. Nevada Land and Resource 

Company (NLRC) was acquired in 1996 for USD48.6million. NLRC currently owns 5,582 acre-feet of 

water rights in Nevada and is applying for up to 105,506 acre-feet of additional water rights. In 

Arizona, the Vidler Arizona Recharge Facility has an estimated capacity of 1million acre-feet with an 

annual recharge capacity of 35,000 acre-feet. The Semitropic water storage facility in California holds 

the right to store 30,000 acre-feet of water until 2035, with an annual recovery of 2,700-6,800 acrefeet 

per annum. In July 2008 Vidler Water sold the company’s interests in Semitropic to the San 

Diego Water Authority for USD11.7million resulting in a net gain of USD8.7million. 

Water Rights held by Pico, 09-2008 

System State Status Acre-feet 

Harquahala, La Paz County Arizona Owned 3,840 

Fish Springs Ranch Nevada 51% owned 13,000 

Lincoln County Nevada Application 40,000 

Sandy Valley Nevada Owned 415 

Sandy Valley Nevada Application 1,000 

Muddy River Nevada Owned 267 

Carson River Nevada Owned 2,069 

Carson River Nevada Option 1,652 

Colorado Colorado Owned 180 

Boise Idaho Owned 7,044 

In March 2002, PICO sold 2,645 acre-feet of transferable ground water in Harquahala Valley, Arizona 

for USD1,450 per acre-foot. A further 480 acre-feet were sold in May 2002 for USD2,083 per acrefoot. 

Sales since 2001 have generated USD15.6million in revenues and USD4.8million in gross 

margins. In 2001, Vidler Water Company sold 83.8% of its original interests in the Semitropic Water 

Banking and Exchange Program for USD10.2million, with a gross margin of USD5.7million. Vidler 

sold 44,000 acres of land in 2003, generating USD14.8million in revenues and USD4.6million to gross 

margins. In 2005, Vidler sold 42,000 acre-feet of water rights in the Harquahala Valley Irrigation 

District of Arizona for USD94.4million at USD2,200 per acre-foot, with a net gain of USD55.5million. 

Vidler and NRLC, profit and loss account 

Y/E 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Vidler 

Turnover 16.8 2.0 106.4 3.0 7.9 

Pre-tax profit -0.5 -5.7 56.2 -2.5 -5.3 

NRLC 

Turnover 5.9 11.6 21.8 41.4 13.5 

403 


USA 


Pre-tax profit 2.0 5.3 12.0 30.5 8.1 

Vidler and NRLC aim to secure and develop water rights where needed for strategic municipal and 

industrial customers. These assets can then either be sold, leased or traded as market conditions 

permit. NRLC’s income derives from land sales and royalties. These markets fluctuate from year-toyear. 

To date NRLC has sold water rights worth USD894,000. 


Name: PICO Holdings Inc 

Address: 875 Prospect Street, Suite 301, 

La Jolla, CA 92037-4264, USA 

Tel: +(858) 456 6022 

Fax: +(858) 456 6480 

Web: www.picoholdings.com 

Web: www.vidlerwater.com 

John D Weil (Chairman) 

John R Hart (President and CEO) 

Richard H Sharpe (COO) 

Maxim C. W. Webb (CFO) 

404 


USA 


PURE CYCLE CORP 

Pure Cycle Corporation was founded in 1976 to provide water and wastewater services to customers 

located in the Denver metropolitan area. The Company designs, constructs, operates and maintains 

systems serving the customers. Water and wastewater services are provided to cities, municipalities 

and special districts. The Company also owns patented water recycling technologies for the recovery 

of wastewater into potable water. 

In 1996, the Company entered into a long-term agreement to provide water and wastewater services 

to the Lowry Range, a district with 27,000 acres of primarily undeveloped land in the greater Denver 

metropolitan area, with 26,700 acre-feet of water which has the potential to serve 78,100 single family 

equivalent households. 

Rights 

(acre feet) 

Denver basin groundwater, Lowry Range 26,700 

Junior South Platte River water 8,125 

Surface storage 29,262 

Senior Arkansas River 1883 water rights 60,000 

Conditionally decreed water rights 

(acre feet) 

Paradise Water Supply, Colorado 70,000 

In 2006, the company acquired 23% of the Fort Lyon Canal Company and through this the rights to 

60,000 acre feet of senior Arkansas River water rights with 40,000 acre-feet per year withdrawal and 

17,500 acres of farmland. The river water will be diverted from agricultural irrigation (with the 

farmland being restored as non-irrigated land) and piped from the Fort Lyon Canal to Denver via a 

150 mile USD400million pipeline. As the transfer is to be self-financed, it is not going to commence 

for many years. This increases the company’s capacity by 102,000 single family equivalent 

households, with potential usage fees of USD100million pa at annual fees of USD600 for water and 

USD400 for wastewater per household. 

Y/E 31/08 (USD 000) 2003 2004 2005 2006 2007 

Water usage revenues 156 145 152 164 150 

Wastewater processing revenues 57 55 58 59 60 

Other revenues 12 4 25 49 56 

Total revenues 225 205 234 272 266 

Operating profit -136 -785 -1,151 -1,359 -2,654 

Net profit -321 -1,976 -1,051 -793 -6,915 

Earnings per share (USD) N/A -0.22 -0.08 -0.05 -0.37 

In May 2004, Pure Cycle signed a long-term contract to provide water service to the Hills at Sky 

Ranch, a planned unit development in unincorporated Arapahoe County. Plans for the Hills at Sky 

Ranch provide for approximately 850 residences along with parks, open space and retail and 

commercial areas. The Hills at Sky Ranch is situated on 160 acres located about 8 miles south of 

Denver International Airport and adjoins the 760-acre, 4,000 dwelling unit Sky Ranch development to 

which the Company will also provide water service. 

Revenues are currently gained from delivering water to the Fairgrounds on Lowry Range (44.4million 

gallons in 2007), operating a wastewater treatment plant (20,000 gallons per day treated with an 

operational capacity of 130,000 gallons per day) 


Name: Pure Cycle Corporation 

Address: 8451 Delaware Street, 

Thornton, CO 80260, USA 

Tel: +1 303 292 3456 

Web: www.purecyclewater.com 

Harrison H Augur (Chairman) 

Mark W Harding (President and CFO) 

405 


USA 


SJW CORP 

SJW Corporation (SJW) was incorporated in California in 1985, serving what is now called Silicon 

Valley. It is a holding company with two wholly owned subsidiaries, San Jose Water Company and 

SJW Land Company. In addition, SJW also holds 1.10million shares in the California Water Service 

Group (CWSG). Altogether, 99% of revenues over the past 3 years have been generated by the 

water activities, while dividends from CWSG have contributed 7% of profits during the same period. 

The San Jose Water Company was incorporated in 1931, succeeding a business founded in 1866. 

The Company provides water to approximately 1million people via 225,000 connections in an area of 

138 square miles in the metropolitan San Jose area, an increase of 50,000 over the 2000 figure. 

Population growth within its service area has resulted in long term growth in its customer base. The 

company provides water services to customers in parts of Cupertino and San Jose and in Campbell, 

Monte Sereno, Saratoga, Los Gatos, and the surrounding areas in the County of Santa Clara in 

California. 40-45% of SJW’s water is bought from third parties, the cost of which has risen from 

USD36.7million in 2003 to USD48.6million in 2007. Since 1997, a programme for renovating and 

replacing the company’s water assets has been under way, most of which were developed between 

1945 and 1980. Capital spending for 2008-12 has been budgeted at USD263million. 

In October 1997, SJWC commenced operation of the city of Cupertino municipal water system under 

terms of a 25 year lease. The system is adjacent to the existing San Jose Water Company service 

area and has 4,400 customers. SJWC made a USD6.8million lease payment to the city, which will be 

amortised over the lease term. The company is responsible for all aspects of system operation, 

including capital improvements. 

SJW Corp., profit and loss account 

Y/E 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Water – Residential & commercial N/A N/A 161.62 169.25 182.92 

Water – Industrial N/A N/A 1.04 1.12 1.29 

Water – Public authorities N/A N/A 8.90 8.90 10.47 

Water – Others N/A N/A 3.96 4.54 5.33 

SJW Land N/A N/A 3.32 4.32 6.49 

Other N/A N/A 1.26 1.11 0.11 

Group Turnover 150.45 166.91 180.11 189.24 206.60 


Net income 18.68 19.79 21.84 38.58 19.23 


Dividends per share (USD) 0.49 0.51 0.53 0.57 0.60 

SJWTX Water Inc, a 97.5% owned subsidiary of SJW Corp was incorporated in the State of Texas in 

September 2005 for the purpose of acquiring the assets of Canyon Lake Water Supply Corporation 

(CLWSC), a Texas nonN/Aprofit water supply corporation. CLWSC is a memberN/Aowned 

nonN/Aprofit water utility headquartered in Canyon Lake, Texas and serves a population of 

approximately 36,000 with more than 7,900 connections in 78 square miles of western Comal County 

and southern Blanco County near San Antonio. CLWSC was acquired for USD3.2million along with 

the assumption of USD20million in corporate debt. 


Name: SJW Corporation 

Address: 374 West Santa Clara Street, 

San Jose, CA 95196, USA 

Tel: +1 408 279 7800 

Fax: +1 408 279 7934 

Web: www.sjwater.com 

W. Richard Roth (President / CEO) 

David Green (CFO / Treasurer) 

R S Yoo (COO) 

406 


USA 


SOUTHWEST WATER COMPANY 

Southwest Water Company (SWC) was incorporated in California in 1954 and reincorporated in 

Delaware on June 30, 1988. The company provides water and wastewater services to some 2million 

people through 700 contracts for managing 460 water treatment plants and 200 wastewater treatment 

plants in 36 states, mainly California, New Mexico, Texas and Mississippi. The company has two 

operating groups; the Utility Group and the Services Group. 

Utility operations 

The Utility Group operates the company’s regulated water activities in California, New Mexico and 

Texas. Suburban Water Systems (SWS) operates in California, New Mexico Utilities Inc (NMUI) in 

New Mexico, Texas Utilities (TU) in Texas and in Alabama, Mississippi and Oklahoma. The division 

currently serves 510,000 people. 

SWS was founded in 1907 and serves 311,000 people (70,968 domestic customers) in Los Angeles 

and Orange County. The city of West Covina’s water system was acquired in February 2000 for 

USD8.5million. This system has 7,000 connections and is near to SWS’s existing activities. Customer 

growth is limited to acquisitions and growth within its existing franchise. In 2007, 73% of Suburban’s 

turnover came from sales to domestic customers, 18% to industrial and commercial customers and 

9% to other customers. NMUI was acquired in 1969 and operates in Albuquerque and Bernalillo 

County, New Mexico, now serving 53,000 people having grown from 800 connections in 1969 to 

17,318 connections in 2007. A small system in northern Mississippi was acquired in 2007, serving 279 

water connections and 378 wastewater connections. The company has a further 250 water and 

wastewater connections in Oklahoma (800 people). 

Texas Utilities consists of the Windermere Utility Company and Hornsby Bend Utility Company 

(acquired for USD4million in October 2000, based in the suburbs of Austin, with 6,081 connections) 

and 87 water utilities and 12 wastewater utilities acquired from Tecon Water Holdings 

for USD66million in July 2004. The activities, now called Monarch Utilities currently 

serve approximately 21,000 water and 3,500 wastewater connections in Texas. A 

USD0.7million acquisition in 2005 added 370 new water connections and 2,600 

connections in 13 water systems in the San Antonio area were acquired in 2007 for 

USD 5.8million. In total, 116,000 people are served in Texas through 105 water 

systems. 

Southwest Water Company, regulated water / wastewater customer breakdown 

Customers served 2003 2004 2005 2006 2007 

SWS 75,027 75,077 75,170 75,186 75,322 

NMUI 12,949 14,311 15,671 16,896 17,318 

Texas 6,081 28,405 32,835 33,519 36,741 

Alabama N/A N/A 4,618 4,243 4,393 

Mississippi N/A N/A N/A N/A 387 

A wastewater system in Birmingham, Alabama was acquired in January 2008 with 4,100 connections. 

This is the second largest transaction by SouthWest Water, serving more than 12,000 residents and 

generating revenues of USD5.2million in 2007. It is adjacent to the company’s Shelby County 

wastewater system which was acquired in 2005 and serves 14,500 people via 4,000 connections. 

SWW – regulated utility system acquisitions since 2004 

System State Year Water 

connections 

Wastewater 

connections 

Cost 

(USDmillion) 

Monarch Utilities Texas 2004 21,000 3,500 66.0 

Shelby County Alabama 2005 0 4,000 8.6 

Midway Water Texas 2005 370 0 0.7 

Austin Texas 2006 244 244 1.4 

Mississippi Mississippi 2007 275 355 0.6 

San Antonio Texas 2007 2,600 0 5.8 

Madison County Alabama 2007 0 120 1.7 

Shelby County Alabama 2008 0 4,100 22.5 

407 


USA 


SOUTHWEST WATER COMPANY 

Service operations 

The Services Group primarily operates in Texas, New Mexico, California, Colorado, Alabama, 

Mississippi, Georgia and New Jersey and had 700 contracts in 2007. Its main subsidiary ECO 

Resources Inc, (ECO) is a wholly owned subsidiary that operates and manages water and wastewater 

treatment facilities owned by municipalities and other companies. ECO was acquired in 1985 and has 

173 municipal utility contracts (MUDs) and 29 operations and management contracts. ECO serves 

approximately 600,000 people in Texas. In 2007, 95% of O&M contracts were renewed. 

In May 2000, ECO Resources was awarded a 5 year, USD10million extension of its contract to 

operate and maintain a portion of the water and wastewater utility system of the city of Sugar Land, 

Texas. As part of the newly approved contract, ECO will expand its service from 7,500 to 12,225 

customer connections and will operate and maintain the entire First Colony utility system, located 

within the city of Sugar Land. In August 2001, SWC acquired 90% of AtlantaN/Abased Operations 

Technologies Inc. (OpTech), a provider of contract water, wastewater and public works services in the 

south eastern United States for USD8.2million. OpTech was founded by Robert W. Monette in 1994 

and operates utilities in Georgia and Mississippi. In June 2003, a USD30million 10 year water and 

wastewater O&M contract was gained covering 30,000 households in Pascagoula, Missouri. 

In November 2002, SWC acquired the majority of AquaSource's water and wastewater contract 

operations business for USD10.3million. These include AquaSource's contract operations in Colorado 

and the Houston area. 

Southwest Water Co., profit and loss account 

Y/E 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Utility customers 94,057 118,403 120,840 130,094 134,411 

Utilities Group 56.90 69.42 78.88 86.32 93.37 

Services Group 116.00 110.18 124.30 132.48 123.98 



Gains on land sales 0.73 0.00 0.00 0.00 0.00 

Net income 7.17 4.51 2.38 9.38 -8.07 

Earnings per share (USD) 0.44 0.26 0.37 0.43 -0.21 

Dividends per shares (USD) 0.16 0.18 0.20 0.21 0.23 

In January 2000, SWC formed Inland Pacific Water Company (IPWC) a JV designed to develop 

waterN/Arelated and wastewaterN/Arelated opportunities in Southern California's San Bernardino and 

Riverside counties. On February 25, 2000, SWS purchased West Covina's water distribution system 

and facilities, assuming ownership and operation of West Covina's water system on that date. The 

transaction added approximately 7,000 connections to SWS's customer base, an increase of 

approximately 11%. Covina generates USD5.5million pa in revenues. 


Name: Southwest Water Company 

Address: 624 South Grand Avenue, 

Los Angeles, CA 90017 USA 

Tel: +1 213 929 1800 

Fax: +1 213 929 1888 

Web: www.swwc.com 

Mark A Swatek (Chairman and CEO) 

Cheryl L Clary (CFO) 

408 


USA 


TYCO INTERNATIONAL LTD 

Tyco International Ltd. (TI) is a manufacturer and supplier of industrial products and systems. TI 

acquired Earth Tech in 1996. In 2008, Tyco sold Earth Tech to AECOM (see company entry) but 

retained the activities in Brazil, Australia and New Zealand. 

Tyco International Ltd, profit and loss account 

Y/E 30/09 (USDmillion) 2003 2004 2005 2006 2007 

Turnover 14,726 16,029 16,665 17,336 18,781 

Operating income -439 345 581 823 -2,519 

Net income 966 2,822 3,094 3,590 -1,742 

Earnings per Share (USD) 1.94 5.64 9.15 7.14 -3.52 

Tyco, populations served 


Australia 0 50,000 50,000 

Brazil 180,000 300,000 300,000 

Grand Total 180,000 350,000 350,000 

Australia 

2004 Cranbourne 25 year BOT Wastewater 

The AUD38million, 30,000 M 3 per day facility is designed to provide recycled water for a number of 

horticultural and agricultural businesses in the Melbourne area. 

2003 Echuca & Rochester 25 year BOT Wastewater 

The 25N/Ayear contract is to design, build, finance, own and operate a water reclamation project for 

Victoria’s Coliban Water. The project will generate revenues in excess of USD80million, serving two 

agricultural communities in the state. It involved the development of an integrated advanced sewage 

treatment system for the two towns for water recovery for irrigation use on farmland. Construction of 

the 2 wastewater treatment plants will cost AUD40million and they entered service in 2004. 

1998 Virginia Plains 20 year management Wastewater 

The 20 year management project is for the provision of 10million m 3 of high grade irrigation water each 

year for 240 clients. This project uses 10% of Adelaide’s wastewater. 

New Zealand 

2005 Mangawhai 15 year BOT Wastewater 

Mangawhai Township is a beach resort north of Auckland. Earth Tech will operate the USD 20million 

scheme for 15 years in partnership with the Kaipara District Council. 

Brazil 

1999 Nova Friburgo 25 year concession 180,000 water and wastewater 

Nova Friburgo is near Rio de Janeiro. Earth Tech is responsible for constructing a new sewage 

treatment facility, expanding the existing water treatment plant, providing ongoing O&M services for 

plants and distribution and collection systems, installing water meters, and managing the utility billing 

program. USD70million of investments will be made during the operating period 

2000 Jau 25 year DBFO 120,000 wastewater 

Jau is in Sao Paulo state. The contract is worth USD80million. Both contracts in Brazil were gained 

through Earth Tech’s MultiserviceN/Aengenharia Ltd subsidiary. 

409 


USA 


TYCO INTERNATIONAL LTD 


Name: Tyco International 

Address: The Zurich Centre, 2nd Floor, 90 Pitts Bay Road, 

Pembroke HM 08. Bermuda 

Web: www.tycoint.com 

Edward D Breen (Chairman and CEO, Tyco) 

Christopher J Coughlin (CFO, Tyco) 

410 


USA 


UTILITIES INC 

Utilities Inc was founded in 1965 and is the holding company for approximately 94 subsidiaries 

providing residential water and/or wastewater services to more than 300,000 customers (over 1million 

people in May 2008) in 400 municipalities in Arizona (2 companies), Florida (22 companies), Georgia 

(2 companies), Illinois (24 companies), Indiana (3 companies), Louisiana (2 companies), Maryland 

(3 companies), North Carolina (18 companies), Nevada (4 companies), New Jersey (2 companies), 

Pennsylvania (3 companies), South Carolina (5 companies), Tennessee (Tennessee Water Service), 

Virginia (2 companies) and Kentucky (2 companies). 10 subsidiaries were acquired during 2003, 

increasing the number of people served by 80,000. In 2002, Utilities Inc.'s revenues were 

USD61million. In 2004, they had increased to USD85million and are approximately USD100million in 

2008. 90% of the 2008 customer base is residential, with the rest mainly being light industrial. The 

2007 acquisition of the Perkins Mountain Water Company in Arizona added 40,000 customers. 

Customers by State, 2002 

State 

Customers 

Arizona 5,450 

Florida 81,000 

Georgia 11,200 

Illinois 17,400 

Indiana 8,300 

Kentucky 7,000 

Louisiana 17,100 

Maryland 7,000 

Mississippi 1,800 

New Jersey 1,100 

Nevada 12,800 

North Carolina 61,100 

Ohio 1,100 

Pennsylvania 5,500 

South Carolina 31,900 

Tennessee 500 

The activities in Ohio and Mississippi have since been sold. Nuon of the Netherlands acquired Utilities 

Inc of Chicago in March 2002 for USD275million, having announced the bid in the previous March and 

undergone regulatory clearance. In May 2005, Nuon announced that it was selling Utilities Inc to 

Hydro Star. The divestment reflects Nuon’s strategy of focusing on the energy markets of 

NorthN/AWest Europe. Hydro Star is a subsidiary of AIG Highstar Capital II, L.P, a private equity fund 

which invests in infrastructure related assets and businesses and is sponsored by AIG Global 

Investment Group (AIGGIG). AIGGIG member companies are subsidiaries of American International 

Group, Inc (AIG). The sale was completed in April 2006. 


Name: Utilities Inc 

Address: 2335 Sanders Road, Northbrook 

Il 60062, USA 

Tel: 

001 800 831 2359 

Fax: 001 775 727 7752 

Web: www.utilitiesincN/Ausa.com 

Larry Schumacher (CEO) 

411 


USA 


WESTERN WATER 

Western Water (WW) seeks to identify undervalued water assets and develop and sell them to 

customers in densely populated areas in the arid western USA. The company operates through the 

acquisition of water rights and other interests in water, the purchase of real estate for their water rights 

and the sale or lease of water at various locations in California and Cherry Creek, Colorado. Due to 

regulatory delays, since 2000, WW has rationalised its operations due to the increased cost of energy, 

making the pumping of water less competitive, along with the company’s increasingly weak financial 

position. No water sales were made in the 2002 financial year and only one in the 2003 financial year 

(which generated a gain of USD964,000). As a result, only the Cherry Creek project is currently being 

actively developed. 

In June 2003, WW sold its shares in the Bear Valley Mutual Water Company (South California) to a 

local city water department, generating cash proceeds of approximately USD723,000 and a gain on 

the sale of USD79,000. In May and June 2004 WW sold Loma Rica Ranch (Yuba County, California) 

and Cardozo Ranch (San Bernardino County, California) for USD1.05million, with an aggregate gain 

of approximately USD85,000 for the Company. 

In March 2005, the company sought Chapter 11 protection. In February 2006 a reorganisation plan 

was approved. This involved the delisting of the company as it no longer has publicly traded shares. 

On 17 th November 2005 the company sold its Cherry Creek assets to the Cherry Creek Project Water 

Authority for USD14million. Cherry Creek Project Water Authority is an intergovernmental entity 

formed by four local water districts. 

After the Cherry Creek sale and the settlement with its debtors, the company will have approximately 

USD2.6million with which to develop its Yuba Goldfields Water Rights project in California. Currently 

the water rights are valued at USD0.12million. This water is near to local agricultural distribution 

systems, including the Yuba County Water Agency’s South Yuba Canal which runs through the 

Goldfields, and the stateN/Awide water distribution system cantered on the Sacramento/San Joaquin 

River Delta. 

In 1998, Aguas de Barcelona (Agbar) acquired 10% of WW. Agbar originally intended to increase its 

stake to 20%, but declined to do so in the light of WW’s ongoing difficulties. Currently, Agbar holds 

6.7% of WW’s equity, along with all of the Class F preferred stock, but this investment has been 

written down by Agbar. 


Name: Western Water Company 

Address: 102 Washington Avenue, 

Point Richmond, CA 94801 

Tel: +(877) 928N/A9282 

Fax: +(510) 307N/A7863 

Web: www.wwtr.com 

Michael Patrick George (President, Chairman, CEO and CFO) 

Reginald M Norris (Director) 

Dennis J Kenny (Director) 

412 


USA 


YORK WATER 

The York Water Company (YWC) has provided water services in York County, Pennsylvania, since 

1816. The company’s water abstraction has a safe daily yield of 35million gallons, compared with an 

average daily consumption of 19.1million gallons in 2007. YWC’s service territory has been gradually 

expanded through the laying of new mains and contracts to sell water to adjoining boroughs. Three 

service extensions were completed in 2002 and two neighbouring townships (Conewago and 

Springfield) were connected during 2003. In 2007, 63% of turnover was obtained from residential 

customers (58% in 1999), 29% from commercial and industrial (31% in 1999) and 8% from other 

sources (12% in 1999), mainly fire service related. 

Industry within the Company's service territory is diversified, manufacturing such items as furniture, 

electrical machinery, food products, paper, ordnance, textile products, air conditioning equipment and 

weight training equipment. 

York Water, operational data 

Customers & consumption 2003 2004 2005 2006 2007 

Consumption (gallons/day) 17,498,000 18,116,000 18,657,000 18,769,000 19,058,000 

Number of customers 51,916 53,134 55,731 57,578 58,890 

Population served 156,000 158,000 161,000 166,000 171,000 

The company has two impounding reservoirs. Lake Williams, the lower reservoir, covers 220 acres and 

holds about 0.87billion gallons of water and Lake Redman, the upper reservoir, covers 290 acres and 

holds about 1.36billion gallons of water. York Water has a filtration plant half a mile south of the city of 

York. The company’s Spring Gardens filtration unit has a capacity of 31million gallons per day and is 

capable of filtering 46million gallons per day during periods of peak demand. YWC installed a 15 mile 

pipeline from Lake Redman to the Susquehanna River for USD23million in 2004, which boosted the 

system’s yield from 23million gallons per day to 35million gallons per day. 

York Water, profit and loss account 

Y/E 31/12 (USDmillion) 2003 2004 2005 2006 2007 

Turnover 20.89 22.50 26.81 26.66 31.43 


Interest paid 2.52 2.13 3.42 3.73 3.92 

Other income 0.01 -0.17 -0.15 0.11 -0.14 

Net profit 4.45 5.30 5.83 6.09 6.41 


Dividends per share (USD) 0 0 0 0 0 

During 2004 and 2005, an additional 351,679 feet of mains were added to the network, more than 

double the average in the previous three years. A further 307,133 feet of mains were added during 

2006 and 2007. 1,110 customers were added to the network due to two tuckN/Ain acquisitions made 

during 2005. In 2007, the Pennslyvannia Public Utility Commission authorised an increase in the 

number of municipalities the company can serve from 42 to 46. The water system of the borough of 

Adamstown was acquired in January 2007, adding 400 customers and the acquisition of West 

Mannheim Township system, which is expected to be completed in 4Q 2008 will add 2,100 more 

customers. 


Name: York Water Company 

Address: 130 East Market Street, York 

PA 17405N/A7089 USA 

Tel: +1 717 845 3601 

Fax: +1 717 843 3793 

Web: www.yorkwater.com 

Jeffrey R Hines (President and CEO) 

Kathleen M Milner (CFO) 

413 


APPENDIX 1: THE WATER CYCLE & WATER SERVICES 

APPENDIX 1: 

THE WATER CYCLE AND WATER SERVICES 

414 


APPENDIX 1: THE WATER CYCLE AND WATER SERVICES 

Distribution of water resources 


The world’s water resources are not a problem. It is their distribution and management in relation to 

current and future demand that presents challenges. The ‘Blue Planet’ is aptly named. Evenly 

distributed upon a perfectly smooth sphere, water would cover the earth to a depth of 2.7km. 

Freshwater alone would cover the surface to a depth of 70m. However, only 0.16% of the world’s 

water is contained in freshwater lakes and rivers. 

Global breakdown of all water resources (km 3 ) 

Salt water 1,348,000,000 97.390% 

Freshwater 36,020,000 2.610% 

- Frozen 27,820,000 2.010% 

- Groundwater 8,062,000 0.583% 

- Lakes and rivers 225,000 0.016% 

- Atmosphere 13,000 0.001% 

Freshwater 

Saline or brackish water has at best little utility for life on the land surface. Life upon the land depends 

on a minimum access to freshwater in a useable form. As the table below highlights, barely 10% of 

freshwater supplies are even potentially readily available for abstraction. The fragment held in the 

atmosphere constantly replenishes the river system, in itself a fraction of surface water supplies. 

Global breakdown of freshwater resources 

Frozen 77.230% 

Groundwater (800-4,000 metres) 12.350% 

Groundwater (>800 metres) 9.860% 

Freshwater lakes 0.350% 

Soil 0.170% 

Atmosphere 0.040% 

Rivers 0.003% 

Plants & animals 0.003% 

Water bearing minerals 0.001% 

The water cycle 

The water cycle refers to the process whereby water is circulated through the biosphere. The cycle 

begins with water being precipitated on to the land surface. On reaching the ground, it either infiltrates 

the soil or runs off into the river system. Water in the soil is either taken up by plants where it is 

returned to the atmosphere through transpiration, or it percolates through the soil. Once through the 

soil, it either enters the river system or recharges aquifers (water bearing rock). From the aquifer, 

water seeps into the river system, is discharged into the sea through coastal springs or is stored in the 

rock. Some water from both river and ground water is taken up by plants and in turn transpired, but 

most is discharged into the sea. Evaporation from seawater, along with a small amount from surface 

waters, is the main source of atmospheric water. 

The global water balance 

Even though more water is precipitated upon the oceans than the land surface in relation to their total 

surface area, the actual process involves more water being taken up from the sea than is returned by 

precipitation. In total, 500,000km 3 pa of water is taken up and returned through evapotranspiration and 

precipitation. While 430,000km 3 pa is removed through evaporation from oceans and 70,000km 3 pa in 

evapotranspiration from land, 110,000km 3 pa is returned to the land through precipitation against 

390,000km 3 pa precipitation into the sea. This results in a net gain of 40,000km 3 pa on to land. It is 

this net gain that sustains life upon the earth’s surface. 

Residence times 

The longer water is held in a particular place, the less enjoins in the water cycle. While water in the 

atmosphere and rivers may account for a small fraction of the global total at any one time, its relative 

415 



mobility means that on average 33 times more water is precipitated each year than is held in the 

atmosphere at any one time. 

Average residence time for water 

Oceans 

Groundwater 

Lakes 

Rivers 

Atmosphere 

2,500 years 

1,400 years 

17 years 

16 days 

8 days 

Water usage 

The intensity of water withdrawal depends to a large extent upon how much water is used for power 

station cooling and for irrigation. Groundwater resources are used mainly for domestic and industrial 

use, especially in urban areas. These resources are not degraded by domestic and industrial effluents 

in the direct way that surface waters are. Instead, aquifers may originate well away from areas of 

effluent discharge and thus their integrity remains relatively unimpaired for quite some time after urban 

watercourses become unsuitable for use. 

Surface water 

Groundwater 

42,650km 3 pa renewable resources

People living in areas of water stress and scarcity (million people) 


1995 2025 

Million people Countries People affected Countries People affected 

Water stress 24 460.0 48 2,849.5 

Water scarcity 18 166.5 29 803.7 

A slum future? 

In 2001, 926million people, or 31.6% of the world’s urban population lived in slum areas. 43% of the 

urban population of less developed economies live in slum areas, compared with 6% in developed 

economies. The UN (‘The Challenge of Slums’ 2003) anticipates this figure rising to 2.0billion by 2033 

and 3.5billion by 2050. 

Percentage of urban population living in slums, 2001 

Sub-Saharan Africa 71.9% 

South-central Asia 58.0% 

East Asia 36.4% 

Western Asia 33.1% 

Latin America & Caribbean 31.9% 

North Africa for 28.2% 

Southeast Asia 28.0% 

Oceania 24.1% 

Access to safe water and sanitation 

According to the United Nations Environment Programme (UNEP), the number of people without 

access to safe drinking water will rise from 1.4billion in 1999 to 2.3billion by 2025 in the absence of 

accelerated capital spending programmes. Approximately 2.6billion people currently do not have 

adequate access to suitable sanitation. In consequence, some 60,000 people die every day due to 

waterborne diseases. 

At current rates of progress, many countries in Sub-Saharan Africa are unlikely to meet the 2015 

Millennium Development Goals (MDGs) before 2100. Indeed, as far as household connection to water 

goes, coverage in that region and in South Asia has decreased. 

Percentage of urban population with access to improved water supply within regions, 2006: 

Improved - Improved - Improved - Unimproved 

Total Piped to house Shared 

Sub-Saharan Africa 81% 35% 46% 19% 

North Africa 96% 91% 5% 4% 

Middle East 95% 93% 2% 5% 

South Asia 95% 51% 44% 5% 

East Asia/Pacific 92% 87% 11% 2% 

Latin America & Caribbean 97% 97% 7% 3% 

CIS 99% 90% 9% 1% 

Developed Countries 100% 98% 2% 0% 

World 96% 78% 18% 4% 

The CIS, Southern Asia and Sub-Saharan Africa are not on target to meet their sanitation MDGs by 

2015. Such is the shortfall, that the global target is currently unlikely to be met. The work still needed is 

emphasised by the fact that 158million people in urban areas in 2006 had no option but to defecate in 

the open. One of the chief challenges for both water and sanitation is the somewhat perverse 

tendency of western donors to channel their aid towards the least needy, with appreciably less aid 

(especially in per capita terms) being directed towards countries in South Asia and Sub-Saharan 

Africa. 

Percentage of urban population with access to improved sanitation within regions, 2006: 

Improved Shared Unimproved Open defecation 

Sub-Saharan Africa 42% 31% 19% 8% 

North Africa 90% 6% 4% 0% 

417 



Middle East 94% 6% 0% 0% 

South Asia 57% 20% 8% 15% 

East Asia/Pacific 78% 8% 4% 10% 

Latin America & Caribbean 90% 0% 5% 0% 

CIS 94% 0% 6% 0% 

Developed Countries 100% 0% 0% 0% 

World 79% 11% 5% 5% 

The Millennium Development Goals have made some impact, with the number without access to 

improved water supplies falling to 1.1billion by 2004, a fall from the 1999 figure, but marginal progress 

since 1990. In contrast, the sanitation data shows less progress and a greater disparity between the 

MDG aims and currently projected outcomes. 

Million People 1990 2004 2015 - Target 2015 - Projected 


Served 4,092 5,320 6,425 6,300 

Unserved 1,187 1,069 794 919 

Unserved – urban 107 170 N/A 240 

Sanitation 

Served 2,569 3,777 5,414 4,829 

Unserved 2,170 2,612 1,805 2,390 

Unserved - urban 475 611 N/A 692 

The growth in unserved numbers reflects the rapid growth of slum and informal settlements. 

Source: WHO / UNICEF (2006) Meeting the MDG drinking water and sanitation target: the urban and 

rural challenge of the decade. WHO, Switzerland & WHO / UNICEF (2008) Progress on drinking water 

and sanitation: special focus on sanitation, WHO Geneva 

Connection rates in major cities: 

Household tap Sewer 

Europe 96% 92% 

North America 100% 96% 

Latin America & Caribbean 77% 35% 

Africa 43% 18% 

Asia 77% 45% 

Oceania 73% 15% 

In excess of 95% of people living in high income countries had satisfactory access to potable water 

and appropriate sanitation services by 1990, along with 74% access to potable water and 68% access 

to appropriate sanitation services by 1990 in medium income countries. Concerns in the more 

developed economies are increasingly being driven by environmental and aesthetic considerations, 

while those in the less developed economies remain rooted to those of basic public health. 

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The cost of ‘free’ water 

Safe supplies of water are not free, but neither are the consequences of inadequate provision. The 

economic cost of poor water supplies and sewerage are in illness (500million affected each year), 

debilitation (15million rendered 'economically inactive' each year) and death (2-5million dying each 

year) from water borne diseases and environmental impairment. Yet such supplies are not cheap. In 

slums around many cities, the cost of (vended) water accounts for a large part of household expenses; 

18% in Onitsha, Nigeria and 20% in Port-au-Prince, Haiti, for example. 

Pressure points in the water cycle 

Of the 42,650km 3 annual net gains through precipitation on to land, 24,000km 3 is lost as surface runoff 

in floods, leaving a net 16,000km 3 of useable water input. Approximately 9,000km 3 pa is readily 

accessible, with an annual abstraction of 3,414km 3 highlighting the scope for local imbalances 

between water availability and its need. It is evident that the element of the water cycle used by the 

human economy is not optimally managed. Much of the water abstracted is not put into productive 

use. 

Optimising the water cycle 

The water cycle needs to be managed in urban areas due to the need for reliable supplies of water of 

a given quality in a limited area along with the treatment of wastewaters generated by human agency. 

The management of the water cycle can be broken into four distinct sections: [1] water abstraction and 

transfer; [2] water treatment and distribution; [3] sewerage; and [4] sewage treatment, disposal and 

recovery. 

Supplies need to be managed so as to maintain the integrity of the water cycle through optimising the 

productive use of water, preventing over-abstraction from surface water resources, enabling the 

recharge of groundwater and preventing the pollution of surface and groundwater resources. The flow 

chart below demonstrates how water technology can be used to mobilise water resources already 

abstracted into productive use. 

Distribution losses for municipal provision can realistically be reduced to 20%, releasing 74km 3 pa for 

productive use. Assuming that industrial leakage can be reduced to 10%, this releases 120km 3 pa for 

productive use. Improving irrigation efficiency to 50% releases 244km 3 pa for productive use, along 

with a further 325km 3 pa of treated municipal water (50% treatment) and industrial water (25% 

treatment). 

419 



Pressure points in the water cycle and their amelioration 

Treated effluent 

for groundwater 

recharge 

Treating effluent 

to protect water 

resources 

5-65% lost 

Domestic use 

494km 3 pa 

Distribution loss 

174km 3 pa 

Economic pricing 

for waste 

avoidance 

In-situ weater 

efficiency 

Leakage 

Management 

Optimise 

Productive use 

Grey water 

management 

Total water withdrawal 

4,179km 3 pa 

Industrial use 

1,210km 3 pa 


240km 3 pa 

20-30% lost 

25-80% lost 

Regional and 

national water 

scarcity 

Agricultural use 

2,462km 3 pa 


1,475km 3 pa 

Agricultural 

water 

undervalued 

and misused 

Sale of water 

rights – transfer 

from agriculture to 

domestic & 

industrial use 

Internalise 

water use 

Drip irrigation and 

high efficiency 

applications 


320km 3 pa 


970km 3 pa 


1,112km 3 pa 

Untreated 

effluent 

not 

Recovery 

125km 3 pa: 

1-2% of 

munuicipal 

10% of industrial 

Sewage treatment & 

effluent recovery for 

agricultural & nonpotable 

applications 

Pinsent Masons Water Yearbook 2008-2009 

420

APPENDIX 2: PRIVATE SECTOR PARTICIPATION 

APPENDIX 2: 

PRIVATE SECTOR PARTICIPATION 

421 



Types of privatisation 


One of the difficulties currently facing the water sector’s internationalisation is the lack of a common 

understanding as to the forms of private sector participation. One person’s lease contract can, in 

extremis, be another’s concession, and so on. An internationally agreed set of concession contract 

definitions is currently being developed by a number of concerned companies and multilateral 

organisations. 

Preludes – privatisation through evolution and revolution 

Consulting and strategy development and implementation contracts are not regarded as full private 

sector participation contracts as they are not involved in the management of the actual assets. These 

contracts are increasingly being used as ways of developing the relationship between a municipality 

and the private sector company so as to decide on the framework for bringing in private sector 

management. Privatisation contracts can be gained outright through a bidding process, or they can 

evolve from contacts established through consulting, construction or engineering activities. A world of 

opportunities beckons. 

Markets can broadly be classified as being primary markets (first privatisations in a country), 

secondary markets (initial privatisation contracts already awarded, but to less than 10% of population), 

tertiary markets (major private sector contracts in place, covering 10-50% of the population) and 

mature markets (significant private sector participation, covering over 50% of people). These market 

types also reflect the ideas of David Hosein and Paul Rathbone of Andersen, who look at markets in 

terms of emotion, economic and ideology. 

Each market offers a risk - opportunity payoff. Primary markets clearly offer more in terms of 

opportunities, especially for a new entrant with no established presence in the country. Against this, 

the privatisation process may be volatile, since there will be limited practical guidance as to how to 

gauge political, regulatory, economic or operational risk. In mature markets, risk management can be 

finely tuned, but this information will probably be shared with a broad range of potential competitors, 

so that the bidding process will be appreciably more competitive. In such a market, an established 

player will seek to benefit from economies of scale via its extant operations, but may prove vulnerable 

if there is a desire for change for change's sake. 

Primary markets (first wave) 

Primary markets are those yet to experience their first wave of private sector contract awards. These 

markets may also be split into those where private sector participation is actively under consideration, 

such as in the Netherlands, South Korea, Nepal and Egypt and those countries such as Switzerland, 

Iran and Japan that for various reasons have ruled out any material changes for at least the short to 

medium term. Despite the progress made by the private sector to date, a clear majority of countries 

remain as primary markets. Privatisation may be initiated through four broad approaches. 

Initial public offering of a corporatised utility. This approach was first adopted in Brazil through the 

partial flotation of SABESP (Sao Paulo). The state government still holds 72% of SABESP's equity 

and has adopted a gradualist strategy towards selling more shares in the company. A more extreme 

example was in the Czech Republic in 1993, where shares in a number of regional utilities were 

offered to municipal, institutional and international investors. 

Private sector concession award for one or more small contracts. A foot in the door approach 

that concentrates on gaining experience of private sector participation through local contract awards. 

This approach has been used in a number of European countries without a history of private sector 

participation such as Norway and Portugal and more recently in Sweden. 

Lease, management and O&M contracts. A gradualist approach, whereby municipalities and the 

private sector get to know each other through the increasing delegation of responsibility to the private 

sector. This approach can be seen at various stages of evolution in Mexico, Mozambique and 

Kazakhstan. It can be argued that these in turn stem from contacts made with private sector 

construction and engineering companies over a long period of time as in Egypt and South Africa. 

Major city concession awards. This is the most abrupt approach, designed to channel private sector 

investment and management towards infrastructure that has been unable to meet the demands of 

urban expansion. This approach is popular in developing economies (for example, Casablanca in 

422 



Morocco and Manila in the Philippines), with city contracts being on occasion divided into zones 

(Manila in the Philippiners and Jakarta in Indonesia) or into water and sewerage services (Budapest in 

Hungary). These contracts typically concentrate on capital cities because they are seen as having a 

lower risk profile than other areas and can thus attract private sector funding more easily. Such is the 

impact of these contract awards that they often result in countries by-passing the second stage of the 

market penetration criteria as outlined below. 

Outside city-states and special regions such as Macao, national contract awards remain distinctly the 

exception. Indeed, the only example to date has been for urban sewerage services for Malaysia. 

Regional contract awards tend to concentrate on rural regions and their provincial towns as in the 

Czech Republic. The only example of a regional privatisation including major cities to date was the 

water and sewerage services privatisation in England and Wales. 

Secondary markets (second wave) 

While cases such as the Czech Republic or Malaysia experienced a far-reaching initial wave of 

privatisation awards, the initial impact of privatisation is typically of a more piecemeal nature. 

Secondary markets are defined as countries where less than five contract awards have been made to 

date and less than 10% of the population receive either water or sewerage services via the private 

sector. Normally one or two water companies would provide these services. 

Tertiary markets (third wave) 

Tertiary markets are defined as countries that have between 10% and 50% of their population served 

by the private sector, usually via six or more separate contracts provided by at least two companies. 

Such a market share can be attained via a single major city concession award as in the case of major 

city contracts, via a single award. Examples of the former include Spain and the USA, while examples 

of the latter include Estonia and Bulgaria. 

Mature markets 

This covers countries where more than 50% of the population is served by the private sector. 

Opportunities exist as new markets are developed in response to environmental compliance (for 

example, sewerage services in France) or through a specific regulatory exercise (for example, inset 

appointments and MOD privatisation in England and Wales). Otherwise, apart from acquiring extant 

companies, most opportunities are to be found in rural areas and small towns, placing the emphasis 

on developing economies of scale and integrating a large number of small contracts into a coherent 

management structure. To date, the only examples are to be found in France, the Czech Republic, 

Chile and England and Wales. 

Differing levels of private sector involvement 

Commercialisation 

Commercialisation calls for the municipal water and/or sewerage entity to be operated as a free 

standing concern that does not involve cross subsidies with other municipal services and runs on a 

self-financing basis. A commercialisation strategy has been adopted in a wide number of countries 

either as an end into itself or as a prelude to more extensive private sector participation. Madrid’s 

Canal Isabel II has operated as a commercialised entity since 1853, without any firm plans for 

privatisation to date. In Australia, Sydney Water has been commercialised, with bulk water provision 

services being handed over to the private sector. Prior to the current privatisation programme, Chile 

has used commercialisation allied with short-term service contracts, delegating responsibility to the 

private sector for a narrow range of services such as meter installation. Santiago’s EMOS is the most 

notable example, having been commercialised in 1989 and sold in 1999. Other examples include a 

number of German cities (e.g. Hamburg), South Africa’s Umgeni Water and Thailand’s municipal and 

provincial water authorities. 

A hybrid privatisation has emerged from a number of these commercial entities where the municipality 

floats some of the shares of the entity while retaining majority ownership and therefore management 

control. The best example is in Brazil, where Rio’s SABESP is actively traded on the national Bourse, 

while the municipality for the time being retains 72% of the company’s equity. 49% of Belgium’s 

Aquafin has been sold to a number of corporate and institutional investors, with overall control being 

retained by MVW, the region’s sewerage management agency. 

423 



O&M and lease contracts 

The next step up involves awarding O&M or lease contracts. Operations & Maintenance (O&M) 

contracts usually operate on a fixed fee basis. Lease contracts typically involve asset operation and 

tariffs, but not capital expenditure. These two types of contract do not delegate full financial 

responsibility to the private operator, especially with regards to private capital investments. 

Concessions 

Concessions involve the private sector operation of assets in order to pay for new facilities and 

upgrading work. Build-own-operate (BOO) and build-operate-transfer (BOT) contracts sell specific 

services to the municipality in relation to a specific programme of capital improvements, while the full 

utility concession contract embraces all aspects of service provision and capital spending. These 

contracts require a much more specific regulatory environment so as to account for the elements of 

risk involved. Other varieties sometimes seen are BOTT (build, operate, train and transfer) and 

DFBOT (design, finance, build, operate and transfer) contracts. 

A BOO/BOT project’s cash flow is usually contractually pre-determined, often with government 

backing. There is an element of construction risk, but the absence of market risk means that the 

project can have more debt loaded in than in a full utility privatisation. A project’s construction risk can 

be mitigated whereby a facility already generating cash flow gets taken over for expansion by the 

private sector. Therefore BOT/BOO projects are an effective means of rapidly organising private 

capital and management towards a narrow range of services. However, some of the simpler projectoriented 

contracts do not affect the utility’s management and operation, thus underlying problems such 

as leakage (and illegal interception), over-staffing and poor tariff collection may not be addressed. In 

these cases, the underlying utility remains uncreditworthy, and it can be argued that a BOO/BOT 

contract may therefore in fact delay system-wide improvements. 

In full utility concessions, existing revenues can be used immediately to service debt, thereby 

mitigating construction risk. Over a period of time, a utility can benefit from a steady flow of revenues 

from a diversified customer base and, if it integrates horizontally, from a diversified asset base. A more 

robust balance sheet can be created, allowing for internal finance as well as the use of capital markets 

to sell long term debt. 

Asset sale 

The most dramatic and politically contentious form of privatisation is the outright sale of the utility’s 

assets. To date this has been used in the 1989 sale of the English and Welsh water and sewage 

companies (WASCs), in two examples in the Czech Republic, in one in Belize (subsequently bought 

back) and in Chile up to 2000. While the assets are in private hands, the licence to operate them can 

be subject to renewal. In the case of the UK WASCs, a 30 year operating licence was awarded to 

each entity in 1989. It is evident that the assets carry no value unless one can operate them, while the 

cost of building a duplicate network would be prohibitive. 

The problem with losing stakeholder participation in utility services is that it can erode the customers’ 

sense of civic duty. During the 1976 drought, water consumption in England and Wales fell and 

standpipes and supplies brought in by tankers were accepted stoically. "Share a bath with a friend" 

suggested Dennis Howell, the then Minister for Drought. In contrast, during the 1995 drought, 

consumption rose amidst intense bitterness even at the possibility of water restrictions being imposed. 

They were not, but it was evident that an unexpectedly large element of the public’s goodwill was 

unintentionally divested in 1989. In contrast, Aguas de Barcelona (Agbar) experienced a significant 

drop in consumption during the 1994-96 drought in Spain. Agbar is a private sector operator of 

municipally owned assets on a concession basis. 

424 



Privatisations – Contract size and extent of privatisation compared 

O&M BOT Full Concession Asset Sale 

Local / USA France UK PFI & inset USA 

Single site 

appointments 

Town / USA Germany Germany China 

Small city Kazakhstan Czech Towns USA 

City Mexico Atlanta Manila India 

City Budapest Jakarta UK WOCs 

River Basin Greater Czech Argentina UK WASCs 

/ Region Amman Regions Italy Chile 

Country Chad (Phase 1) Ghana (urban) Chad (Phase 2) N/A 

Characteristics of the main types of water and wastewater privatisation contracts 

Because of the elastic nature of definitions at present, the five forms of privatisation outlined below 

ought to be regarded as indicative. It is quite likely that a contract could offer elements from the 

differing categories. This can be a material concern in markets such as China, where the authorities 

are seeking foreign investment and management while seeking to impose the most restrictive terms 

that they can get accepted. 

Operations & management contract (O&M) 

Time horizon 2-5 years, up to 10 Ownership Public 

Customer Government / Municipality Investment Public 

Cash flow profile Fixed fee for service Operation Public 

Construction risk None Tariff collection Public / Private 

Regulatory risk None 

O&M contracts allow the private and public sectors to get to know each other in a relatively low risk 

environment. They do not address problems of municipal inefficiency. The short term nature of the 

contract means that political stability can be poor and there is limited scope for the private sector to 

improve the performance of the utility. Examples include: metering, leakage reduction and systems 

management for Mexico City (Mexico, four contracts held by Suez, VE and United Utilities) and water 

management for Antalya (Turkey, Suez). 

Lease contract 


Customer Retail Customer Investment Public 

Cash flow profile Subject to market risk Operation Private 

Construction risk None Tariff collection Private 

Regulatory risk Medium 

The municipality controls the assets, while the private sector controls their operation. Risk elements 

start emerging, with the private sector now dealing directly with the customers, and thus this can be 

the focus of discontent. Examples include: water and sewerage management in urban areas of Guinea 

(SEEG, Bouygues/Veolia) and water services for Dakar and other major urban areas of Senegal 

(DSE, Bouygues). 

BOOT/BOT/BOO/TOT concession 


Customer Govt /Municipal Investment Private 

Cash flow profile Pay on completion Operation Private 

Construction risk High Tariff collection Public 

Regulatory risk Low 

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Asset ownership under the four concession types 

BOO Build Own Operate Concessionaire retains ownership of assets permanently 

BOT Build/Operate/Transfer Hands over assets at end of concession, never having owned 

them 

BOOT Build Own Operate Hands over ownership of assets at end of concession 

Transfer 

BOOT Transfer Operate Transfer Assets handed to operator, taking ownership of assets during 

contract and returning them at end of concession 

Concession contracts call for a full understanding of the financial risks involved with the project. These 

concession contracts can be regarded as the classic water privatisation model. Examples include: 

water treatment BOO for Riverland (Australia, United Utilities) and a sewage treatment works BOOT 

for Puerto Vallarta (Mexico, Biwater). The UK’s Private Finance Initiative sewage treatment contracts 

are being awarded on a BOT basis. 

In many cases, the concession award takes place with the splitting of the water and sewerage entity 

into a service provision entity and an asset owning entity. The concession winner gains control of at 

least a significant proportion of the service provision entity’s equity, along with management control. 

The municipality in turn retains at least a controlling stake in the asset owning entity. The latter entity is 

subsequently responsible for the extant assets and new assets are vested into this entity at an agreed 

date. 

Full utility concession 

Time horizon 20-30 years Ownership Public 

Customer Retail Customer Investment Private 


Construction risk Low Tariff collection Private 

Regulatory risk High if politics volatile 

In this case, the private sector is allowed to get on with upgrading and operating the services, while 

developing new assets for handing over to the municipalities in the longer term. There have been 

mixed results to date, but some outstanding successes such as Metro Manila in the Philippines. 

Examples include: water and sewerage operations for Tallinn (Estonia, Tallinna Vesi) and water 

provision for Malacca (Malaysia, VE). 

Asset sale 

Time horizon In perpetuity Ownership Private 

Customer Retail Customer Investment Private 


Construction risk Very low Tariff collection Private 

Regulatory risk Very high 

Problems of public perception and changes in regulatory priorities have meant that with the exception 

of Chile and two companies in the Czech Republic, the ‘British model’ (as asset sales have been 

dubbed), has not been copied abroad. In the USA and in one example in India, companies developed 

the assets in the first place. 

The ‘British’, ‘French’ and ‘German’ models 

The World Bank calls delegated water management through concession awards the ‘French model.’ 

The ‘French model’ is typically used to contrast it with the ‘British Model’ of asset sales. In fact, the real 

‘French Model’ is the Affermage lease as traditionally used in private sector contracts in France. To 

make matters more complex, there is a recent tendency to refer to the ‘German Model’ as well. This 

approach is where the operating assets are corporatised and a minority of the shares in the assetholding 

company are held by one or more private sector companies, who in turn operate the 

concession. This is known as the ‘Kooperationmodel’ or the ‘German Model’. A further variant of the 

‘German Model’ is the ‘Beteribermodell’, where the private sector operator pays a fixed rate for the 

right to operate the water or sewerage services. The ‘Kooperationmodel’ probably best describes the 

majority of concession contracts. 

426 



The models compared: 

Name Description Examples 

British Model Asset sale UK Water Plcs 

French Model 1 Affermage lease Suez/VE/SAUR (home) 

French Model 2 Concession Suez/VE/SAUR (international) 

German Model 1 Kooperationmodel Berliner Wasser (VE/RWE) 

German Model 2 Beteribermodell Gelsenwasser 

Generally speaking, the confusion caused by these names and the contracts that they refer to 

highlights the need for globally agreed definitions of contract types. They ought not to play a significant 

role outside discussions about privatisation approaches and philosophies. 

The popularity of each approach 

The table below is based upon water and sewerage privatisation awards identified by the World Bank 

in developing economies during 1990 to 2007. 

Private participation in water and sewerage in developing countries, by contract type, 1990–07: 

Investment in projects by type (USDmillion) 

Concession 38,618 

Divestiture 7,099 

Greenfield project 9,161 

Management & lease contract 1,593 

Total 56,471 

Investment in projects by subsector (USDmillion) 

Subsector Segment Projects Investment 

Treatment plant Water & sewerage 12 292 

Water 120 8,113 

Segment 163 3,945 

Total 295 12,320 

Utility Sewerage collection 1 43 

Sewerage & treatment 9 2,726 

Water utility with sewerage 215 31,326 

Water utility only 64 10,026 

Total 289 44,121 

Source: World Bank, PPI database 2008 

It is understood that the O&M entry in the above table includes lease contracts. While there are many 

of these contracts, the lack of private sector investment involved highlights their role as a partial 

privatisation that does not mobilise new sources of private sector investment. The experience to date, 

especially in developing economies, suggests that O&M and lease contracts are becoming a stepping 

stone towards concession awards at a later date or will continue to be used to address specific areas 

of concern, especially when linked with aid finance and loans from multilateral institutions. Greenfield 

operations are typically of a site specific nature, involving the construction of a water or sewage 

treatment facility, as seen in the UK’s PFI. In recent years, a number of greenfield contracts have been 

awarded in areas earmarked to become new housing or industrial zones. This approach has had 

some popularity in the Philippines. Divestitures have been seen to date in Chile. Given the confusion 

between contract types, it is not perhaps worthwhile to classify the concession contract types more 

specifically. Nevertheless, the concession approach, allied with the splitting of water and sewerage 

entities into operating and asset holding companies is becoming the favoured approach towards water 

privatisation in many countries. 

427 



Water and power contracts compared 

Water is too often seen as power’s poor relative. It lacks the glamour of the major power contracts in 

terms of immediacy of delivery and the prospect of expensive new plant. Even so, its lower profile 

offers the prospect of more attractive returns. 

Power and water privatisation pros and cons compared: 

Service sector Water / Wastewater Power 

Political risk 

Politics 

High political risk 

‘God’s gift’ ought to be free 

Essential for life & health 

At the national level 

Essential for modern comforts 

A new resource needs to be paid for 

Rate of return High (15-25%) 

A few global and local players 

Lower degree of competition 

Size of project Small to medium 

(for first 5 years) USD50–400million capex 

Technology import Low part of overall cost 

Mainly local construction 

Medium (10-15%) 

Many global and regional players 

Highly competitive market 

Medium to large 

USD250–1,100million capex 

The main cost component 

Imported or via joint ventures 

It is interesting to note that some of the arguments against water, when compared with power, appeal 

to the sense of the irrational. These arguments are being eroded by the expediencies noted in the 

sections above. One of the more common arguments against private sector involvement in water and 

sewerage services against power (and telecommunications) is that the former are more ‘essential’ or 

‘basic’ than the latter, especially for poorer people. The manifest shortcomings of the status quo tend 

to be overlooked in such debates, along with the fact that water and sewerage programmes can 

largely be put into place with the judicious use of local manufacturing and technological capabilities. 

This is not to denigrate energy provision projects, but to highlight the importance of adequate water 

and sewerage services in economic development. 

The bad news (except for project arrangers) is that the amount of legal and preparatory work for a 

water/sewerage and a power project is broadly similar. It is tempting, given the disparity in size 

between these projects to stint on such work. It is to be hoped that the examples included in this 

publication will demonstrate the paramount importance of due diligence in both bid preparation and 

contract negotiation, while treating each contract on its own. 

The politics of PSP and service extension 

One of the most common political arguments against privatising water and sewerage services is that it 

will mean that water will be too costly for poorer people. In fact, pragmatic pricing policies based upon 

charging more per unit of water for households who use water for non-essential purposes has made 

private water provision both affordable and viable. Cross-subsidies and social provisioning lie at the 

core of service extension. Appropriate and safe water and sanitation services can be provided for 2- 

5% of household income. Questions about affordability and private sector involvement in developing 

economies tend to ignore the fact that under the current arrangements, it is the poorer people living in 

urban areas who have to pay over the odds to water vendors for supplies of distinctly dubious quality. 

People are willing to pay an economic price for water services if it comes with guarantees of quality 

and availability. 

Comparing the cost of water supplied from household connections and informal vendors 

USD per m 3 Household tap Public tap Water vendor 

Bandung, Indonesia 0.38 0.26 3.60 

Dhaka, Bangladesh N/A 0.08 0.84 

Kathmandu, Nepal 0.18 0.24 2.61 

Bombay (Mumbai), India 0.07 0.07 0.50 

Source: McIntosh, A & Yniguez, C. (1997) 

It is the absence of piped water that costs more both in financial and public health terms. Popular 

support exists for adequate supplies of water and improved public health at an affordable rate. 

Opposition is most visible amongst the better off households who oppose paying an economic price 

for piped water supplies for gardens, swimming pools and other non-essential household uses. 

Indeed, with the lack of metering or progressive tariff structures, they are subsidised by poorer 

428 



households. The fact that these are also the people with the most political influence means that the 

political picture is often distorted. 

The practicalities of delivering service extension 

What can the private sector offer to the unserved urban poor? For multilateral institutions, 

governments, municipalities and the private sector, when seeking to use PSP in service extension; 

three questions need to be answered: 

• Can these projects be delivered more cheaply? 

• Can new sources of finance be mobilised? 

• Can extant assets be operated more efficiently? 

These questions apply to all water and sewerage PSP projects, but are particularly pertinent here. 

UU’s water and sewerage contract in Manila (Philippines) involved a price cut of 65% in 1997 and is 

performing satisfactorily in terms of finances and service delivery (see company entry). Finance has 

become problematic, with the project finance market currently running at perhaps 25% of its peak 

capacity seen in the late 1990s. The private sector has two real strengths, mobilising extant assets to 

optimise their efficiency and developing new assets so that they provide a given level of performance 

at the lowest price. 

The challenges in arranging finance stems from poor risk management and concerns about foreign 

currency exposure. A mix of foreign and international debt can help to ameliorate this, as is being used 

in Malaysia and China. Otherwise, it remains essential for multilateral institutions, development banks, 

politicians and international aid agencies to create the right conditions to encourage these capital 

flows. One of the most important issues here is deciding if a concession is to be supported by outright 

grants designed to lower the cost of service extension. 

At the same time, cost recovery in the medium to longer term is essential. The key here has to be 

getting the cost of service provision down to affordable levels by using an appropriate and 

upgradeable infrastructure. 

Privatising water and sewerage services can reduce capital spending by 20-45% and through 

economies of scale and efficiency measures, service provision costs by 10-25%. Capital spending 

costs are reduced by shifting construction work away from technology for its own sake to a 

performance-related basis, along with ordering through the contract holder’s parent company. Cost 

reductions are driven by competitive tendering whereby the competing bidders are motivated to find 

the most cost effective ways of delivering a set of service criteria for a satisfactory rate of return. This 

approach creates incentives for the bidders to identify areas where they can drive operating costs 

down while at the same time improving service quality. Often the two will be linked. People are more 

willing to pay when they receive a reliable service, with demonstrable improvements in water quality. 

Reducing distribution losses allows more water to be provided to the customer without needing to 

mobilise new resources. Progressive tariff policies, allied with effective billing and the removal of illegal 

connections, drive down the overall cost of water provision for the less well off. 

The private sector’s role 

In 2000, Suez served 46million people in developing economies and 8.5million people classified as 

among the urban poor. VE, UU, Bouygues and RWE, among others, also provide services to the 

urban poor where there were none prior to privatisation. Suez’s 2002 publication ‘Bridging the Water 

Divide’ provides a number of case studies. The emphasis lies in developing a new infrastructure that 

meets current needs (piped water and sewerage) that can be upgraded as and when higher standards 

of service delivery are needed. By mobilising local labour at street level, the costs of developing these 

services can be greatly reduced. Finally, PSP has much to offer in making sure that the greatest 

benefits can be delivered for a minimal cost. 

Dealing with corruption 

There have been several highly publicised cases of corporate malpractice relating to the World Bank 

supported Lesotho Highlands Dam project. While no companies directly involved in the water and 

wastewater sector have been included in the World Bank’s listing of proscribed entities, the perception 

of corporate corruption in the procurement of private sector participation in the sector has been 

relentlessly exploited by the various anti privatisation bodies. 

429 



At the same time, the private sector’s response to these allegations has been reactive in nature. A 

number of wide ranging statements, commitments and charters have been launched, but these have 

tended to avoid directly addressing the complaints raised by the various anti privatisation lobbies. As is 

the case with most research on the performance of Public Sector Participation (‘PSP’), investigations 

into corruption have chiefly been carried out by academics attached to anti-privatisation lobbies and a 

range of NGOs, principally in North America. This gives the anti-privatisation lobbies a great 

advantage when communicating ideas to the media. In consequence, anti-PSP polemics are 

effectively unchallenged. 

In terms of perception, it is fair to say that the international media, politicians and NGO lobbies see the 

private sector in general and privatisation in particular as causing corrupt practices to take place in the 

provision of water and sewerage services. In reality, corruption tends to be endemic under public 

ownership and operation. This is because water and wastewater per se are exposed to corrupt 

practises at a number of operational levels due to the nature of the services they operate. Such 

practices get minimal exposure at anything beyond the local level, as it is accepted modus operandi 

for providing these services. 

The Camdessus Report’s Recommendations 

‘Corruption’ is mentioned 11 times and ‘corrupt’ a further two times in the Camdessus Report on 

"Financing Water for All" (CR). CR notes that corruption can arise among public and private, local and 

international participants in the water sector. The impact of independent NGOs such as Transparency 

International has been limited by the reluctance of governments, multilateral institutions and 

companies to adopt their recommendations on a consistent basis. CR’s specific recommendations 

with regards to water and corruption can be summarised as: 

• Capacity building is to be encouraged 

• Water policies need to be defined and implemented 

• Leadership ought to be of a high calibre 

• The multiplicity of opportunities ought to encourage healthy competition 

• NGOs and stakeholders should be encouraged to expose corrupt practices 

• Companies are urged to co-operate to develop methods for promoting ethical behaviour 

• The public sector needs to develop standards that place their behaviour above reproach 

• Private participation transactions should be made more transparent 

• Develop best practice and model clauses in the legal agreements for private participation 

Its recommendations are well meaning and hard to dispute. Indeed, they are of such a broad and 

generous nature that at first it appears churlish to query them. They do, however, need to be 

implemented and to take effect by the CR’s proposed 2006 reporting deadline. 

The private sector needs to acknowledge its structural failings in communicating that there are 

challenges to PSP playing a leading role in developed economies while being a material part of the 

process of providing universal access to water and sanitation services in urban areas. There is an 

urgent need for the private sector to sponsor independent research so that a process of engagement 

can begin. 

Define corruption 

The cost of corruption can only be understood when stakeholders know where it happens and how it 

affects people’s lives. So, before concerns about corruption can be addressed, we need a commonly 

accepted set of definitions as to what corruption is and is not. There is also a need to differentiate 

between what might be called ‘actual’ or fiscal corruption and ‘moral’ corruption, where bidders abuse 

the tender process by submitting a loss-leading bid in anticipation of a successful re-negotiation 

procedure afterwards. 

What is it? 

Country – Bribes demanded at the Government/Ministerial level 

Municipal – Bribes for contracts, bribes for services or for avoiding billing/penalties 

Corporate – Companies bribing in order to gain contracts 

When does it take place? 

Water allocation and billing – Avoidance of bills, setting up illegal connections, getting access, etc 

Regulation – Avoidance of penalties over illegal abstraction/connection, discharges, etc 

Procurement and contracting – Bribes for the award of goods/service provision contracts 

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During the privatisation process – Bribing to influence the tendering/award process 

Why is it wrong? 

It needs to be spelt out that corruption hampers service provision, affordability and the efficiency of 

service provision, along with public health and environmental implications. For politicians, companies 

and municipalities this does mean acknowledging that corruption occurs both in the public and private 

sectors and that it is measurable. 

While ‘moral’ corruption may be seen by some as ‘part of the game,’ it has consistently undermined 

confidence in the PSP contract award process and has unduly politicised the re-negotiation process. 

Transparency International’s Business Perception Index (‘BPI’, how businesses from varying countries 

are seen when dealing in developing economies - surveys in 1999 and 2002) and annual Corruption 

Indexes (a synthesis of national surveys on the perception of corruption within each country) are a 

useful starting point. It is of interest to note in the 2002 BPI survey that public works / construction 

scored the lowest of all categories given, with 46% of all recipients stating that this sector was seen as 

likely to offer the biggest bribes. 

Consistent bidding and financing criteria 

Bid criteria need to be developed that are applicable in developed and developing economies. The 

greater the replicability of contract types and procedures, the less scope there is for abuse to take 

place as all parties are increasingly familiar with the system, especially those involved in overseeing 

the probity of the bidding process. This also reduces the cost of independent scrutiny and would allow 

for such scrutiny to take place on a regional basis. 

Talks have been going on since at least 1998 about developing commonly accepted 

definitions/templates for contract types, so that all interested parties know what is going on at each 

point in the contract development and negotiation process. This process needs to be expedited with 

the aim of developing legally binding (and therefore fungible or supra-national) contract definitions that 

could be brought into play by the World Bank and regional banks (‘regional’ refers to groupings of 

countries). 

A re-evaluation of renegotiation attitudes and procedures 

Re-negotiation of contracts is seen by stakeholders and NGOs as a cynical attempt to maximise 

profits once the contract award process is out of the way. There is no doubt that water contracts in 

developing economies are more volatile than most. Between 1990 and 2001, 3.5% of World Bank 

funded water contracts were cancelled against 1.9% for infrastructure projects in general. In value 

terms the difference is even more marked: 11.3% for water versus 3.2% for infrastructure projects 

overall. During the same time, 71% of 89 World Bank supported concessions were renegotiated, 5% 

by the companies and 66% by the Governments. While almost all contracts were subject to a bidding 

process, regulation was generally notable by its absence. 

A formal re-negotiation process needs to be built into contracts, based upon agreed-on performance 

and price criteria. Such a process can work both ways, as when circumstances swing favourably in the 

concession’s direction (some currencies appreciate against the US Dollar over time), this ought to 

release a mechanism to compensate for previous adjustments where appropriate. 

Windows of transparency (1): Regularising bidding and negotiation procedures 

Contract Stage 

Call for tender 

Bids received 

Final bids received 

Award of contract 

Announcement of terms 

Announce regulatory process 

Contract commences 

Quarterly / half year key criteria 

Annual review 

Outstanding issues highlighted 

Information placed in the public domain 

Tender documents & bid criteria 

Ballpark figures (non company specific) 

Ballpark figures (more specific) 

Relate award to bid criteria 

Explain any changes to original bid criteria 

Criteria and current performance data 

Performance prior to PSP 

Critical issues highlighted 

Regulatory returns & independent reviewing 

Performance against targets, new targets 

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In each case, the idea is to release information to interested parties in an open, consistent and 

controllable manner. Once final bids are in, competitive secrecy is of historic importance. If pre-award 

negotiations need to take place, stakeholders need to have confidence in this process. The entire 

process can be extended into making clear to all parties the criteria that are to be material when 

bringing the re-negotiation process into play. 

Communicating best practice 

This calls for a holistic approach to countering corruption. The regulatory climate in England and 

Wales may be onerous, but no stakeholder could reasonably complain about being deprived of data. 

Comparative data of increasing accuracy (and methodological rigour) at all operational levels not only 

creates an unrelenting drive towards ‘ideal’ operational efficiency; it also makes it increasingly hard for 

financial malpractice to take place. 

Windows of transparency (2): Eliminating malpractice, rewarding efficiency 

National/regional database for: 

Best practice – specific examples of utility performance and their replicability 

Benchmarking – developing comparative criteria (avoiding Ofwat’s ’cult of the comparator') 

Operational efficiency – knowing what a system can deliver under given circumstances 

Global database for (PPP weighted, as appropriate): 

Cost of technology – ballpark figures for widely used technology 

Cost of construction – what it costs to build/install units of infrastructure 

Cost of professional services – general range of expected costs 

The latter will doubtless prove particularly contentious. In reality, this refers to hourly rates and so on, 

since flexibility and experience is essential in professional services, especially when dealing with more 

inexperienced clients. 

Engaging NGOs and stakeholders 

NGOs (Non Governmental Organisations) need to be made part of the reporting process. Attacking 

corruption is in their interest and as it is also in the interest of reputable PSP players, they have little to 

fear from each other. One of the reasons for faltering levels of ODA (Overseas Development 

Assistance) in recent years, especially in water and sanitation, is the feeling that money is not being 

spent where it ought to go. 

Giving NGOs access to information through the mechanisms outlined above will allow confidence in 

the process to be built. They also have a role to play in whistle-blowing at all levels of malpractice. It is 

essential that the private sector have a formal set of procedures to protect people within their 

companies who wish to expose corruption. 

Stakeholders, especially customers also need to be formally involved within this process. Therefore a 

reporting mechanism needs to be set up for reporting their concerns about corruption (and other 

concerns about service delivery). The NGO community has a role to play here, along with liaising with 

the regulators to ensure that such information is channelled in a controlled manner. 

Regulators and regulation 

Independent regulators are essential. As the UK experience has shown, regulation is not cheap (Ofwat 

is arguably an industry in itself) and it takes time for a regulator to know its market. It places a great 

emphasis on efficiency and meeting targets, both of which minimise the scope for corruption. In 

Scotland, the Water Commissioner is adopting a similar approach with the state-held Scottish Water, 

demonstrating that regulation and reporting can take place within the public sector. This experience 

has highlighted why municipal entities need to be exposed to independent regulation. 

Regulation of a suitably robust nature (and allied reporting systems) needs to be in place before the 

privatisation process starts. Perhaps the initiation of such schemes ought to mark the effective 

beginning of the privatisation process. These reporting systems need to be developed on a tripartite 

basis (economic regulation, water quality and service delivery and environmental protection and 

resource management), ensuring that the various reporting functions operate independently of each 

other, so as not to compromise their separate interests. To address the cost of regulation, the World 

Bank, regional development banks and other interested parties should support the setting up of 

regional regulators along with supporting capacity building for analytical and comparative work. These 

432 



regulators would be responsible for developing comparative data on a regional basis and assisting the 

implementation of a national regulator for each country where PSP is about to take place. 

Opening windows of transparency 

If confidence in the bidding process is undermined by its perceived opacity, then windows of 

transparency ought to be opened at suitable stages in the process as outlined in this section, allowing 

stakeholder scrutiny and building external confidence in the process. 

Too much is said about commercial secrecy. As CR notes, healthy competition is the scourge of 

corruption. Free economies deserve freedom of disclosure and the right to make a free choice based 

on information which stakeholders and NGOs can also have confidence in. A number of mechanisms 

exist which can be used to ensure the generation of such information is part of the privatisation 

process. For example, certification with the ISO 9000 (total quality management) and ISO 14000 

(environmental management systems) standards, externally audited by an international agency ought 

to be required within a given timeframe. 

Externally recognised and monitored operational quality criteria have a significant role to play in the 

capacity and confidence building process. This means that the OECD Convention needs to be an 

integral part of each process (the 1998 Convention on Combating Bribery in International Business 

Transactions), placing pressure upon countries that have yet to adopt it. The World Bank’s 1996 

Guidelines for Procurement under IBRD Loans and IDA Credits remain valid and need to be seen as 

an effective sanction against potential transgressors. 

Concern has also been expressed about perceived information asymmetries that favour private sector 

companies with a wide experience of market conditions and strategies. This can lead to stakeholders 

regarding the bidding (and re-negotiation) process with scepticism. These concerns are best 

addressed through a capacity building programme designed to ensure that local and national interests 

are suitably addressed, while a formal disclosure system before, during and after the privatisation 

programme allows stakeholders to have the information they need to be able to constructively engage 

with the service provider, the private sector and the regulators. 

Many of the mechanisms called for are necessary for building up competitive domestic markets along 

with the ability to compete effectively on a regional basis. Therefore the capacity building exercise will 

benefit the local private sector as well as the regulators and NGOs. 

The need for independent and unbiased analysis of the role PSP can play in assisting the aim of 

universal service provision, as well as the challenges facing the private sector remains paramount. 

The absence of such research undermined the credibility of the Kyoto process and must not continue 

to be allowed to undermine the credibility of the private sector as a whole. 

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APPENDIX 3: 

THE PRIVATE SECTOR AND THE MILLENNIUM DEVELOPMENT GOALS 

434 




In order to move forward on this contentious issue, a multi-stakeholder review should be undertaken. 

We believe that it is only through such a review (similar to the World Commission on Dams) that the 

final, authoritative word can be made on whether PSP benefits the poor. We also believe in the 

necessity of building the capacity of civil society actors to influence privatisation processes and to hold 

governments and the private sector to account. This needs to start with improving their knowledge and 

understanding of the issues surrounding failing water services, and enabling civil society groups 

around the world to learn from each other’s experiences of intervention in privatisation processes.’ 

Source: New Rules, New Roles: Does PSP benefit the poor? Tearfund, 2003 

This Appendix contains some personal thoughts about issues affecting the private sector and the need 

for it to play an appropriate role in assisting extension of access to safe water and sanitation services 

over the next two decades. 

2000-2025: The World Water Vision 

The World Water Vision (WWV) for 2025 was launched at the Second World Water Forum at The 

Hague in March 2000. It was designed to represent a multilateral and multinational consensus for 

gaining universal access to water and sanitation by 2025. In September 2000, 189 United Nations 

member states adopted the Millennium Development Goals (MDGs), including to ‘Halve, by 2015, the 

proportion of people without sustainable access to safe drinking water and basic sanitation.’ The 

Second Earth Summit in Johannesburg (2002) ratified the MDG targets and as with The Hague’s 

World Water Vision, emphasised the role of the private sector in providing financial and management 

resources. 

According to figures developed by the World Bank in the late 1990s (for basic services) and various 

sources in the EU and the USA (enhanced services), the funding needs identified for providing basic 

(driven by public health concerns) or enhanced (driven by environmental standards) water and 

sanitation services over the coming decade are as follows: 

USD billion required Basic 

services 

Enhanced 

services 

Asia 220-300 10-30 

Latin America 200-250 0 

Africa 80-100 0 

Middle East 45-65 0 

Eastern Europe 30-50 0-20 

N America & W Europe 25-35 300-450 

Total 600-800 310-500 

Prior to the World Water Vision, traditional assumptions for private sector participation (World Bank) 

expected to see the private sector contribute 5-15% of funding needs in developing economies. This is 

equivalent to USD4-12billion pa. The increase in forecast capex needs from USD30billion to 

USD80+billion pa has been accompanied by an increase in the anticipated scope for private sector 

finance to USD10-20billion pa. Such a financial commitment will not take place unless adequate 

investment conditions exist and these require private sector participation in the management of these 

services. 

WWV 2025: Water, sewerage and sewage treatment spending, 1995 to 2025 

The need for basic service provision 

Developing countries 2000 2025 

Population (million) 4,760 6,530 

Lacking safe water (million) 1,300 330 

Lacking sanitation (million) 2,600 330 

Forecast Investment (USD billion pa) 70-80 180 

Water and sewerage spending, 1995 to 2025 

USD billion pa 1995 2000-25 

Drinking water 17 17 

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Sanitation 1.5-2.5 15 

Wastewater treatment 11.5 50-60 

Total 30 82-92 

Source: Prynn P & Sunman H, Getting the water to where it is needed and getting the tariff right. FT 

Energy Conference, Dublin 11-2000. 

The World Water Vision assumes that USD2,050-2,300billion in total needs to be invested over a 25 

year period. Assuming that all contracts will be debt financed (where PSP is being used, it will in fact 

be 70-80% debt financed), and on the basis of 7% for servicing the cost of assets, 10% for the 

operation of these assets and an overall return of 5% on assets for debt repayment and returns for the 

private sector where appropriate, this points to costs of 22% on the total investment. This could point 

to a market with USD450-500billion per annum in the developing economies. Assuming in reality that 

USD40-50billion each year will be spent (factoring in the private sector’s ability to bring the cost of 

capex down by 15-25%), this still points to a market worth USD220-275billion pa by 2025. There will 

be 7.7billion people in developing economies by 2025, with approximately 2.9billion living in urban 

areas. This equates to USD75-95 per person per annum, which is a fairly demanding figure for these 

economies. The problem is that the World Water Vision figures assume that USD500 per capita needs 

to be spent ‘conservatively’ to connect all people to water and sewerage services in urban and rural 

areas. 

Estimates for current and extra annual spending need for universal service provision 

USD billion Vision 21 Briscoe GWPFA 

2000 Future 2000 Future 2000 Future 

Water N/A N/A N/A N/A 13 13 

Sanitation N/A N/A N/A N/A 1 17 

Water & sanitation N/A 75 25 N/A 14 34 

Municipal wastewater N/A N/A N/A N/A 0 70 

Industrial wastewater N/A N/A N/A N/A 7 30 

Total wastewater N/A 75 N/A N/A 21 100 

Total N/A 150 N/A N/A 35 134 

Vision 21: World Water Council 2002 

Briscoe, John: International Journal of Water Resources Development, 1999 

GWPFA: Global Water Partnership, Towards Water Security: A Framework for Action, 2000 

The UN Millennium Project Task Force on Water & Sanitation 2005’s report gives a round-up of 

general estimates for spending needs (USDbillion pa): 

Source Year Total Water Sanitation 

Global Water Partnership 2000 30.0 13.0 17.0 

Vision 21, WSSCC 2000 8.9 5.2 3.7 

WHO / UNICEF 2000 NA 3.1 12.6 

World Bank 2002 29.0 13.0 16.0 

Camdessus Report [1] 2003 40.0 23.0 17.0 

Smets [2] 2003 32.0 NA NA 

Evans & Hutton 2004 13.7 2.1 11.6 

UN MDG Task Force 2004 6.7 4.5 2.2 

Notes 

[1] 32 more for full WATSAN 

[2] 20 for new facilities, 12 for rehabilitation 

The variable nature of these forecasts is a real cause for concern and more serious analysis of these 

costs, rather than extrapolations of other people’s figures are badly needed. The expression ‘back of 

436 



envelope calculation’ was invoked in one review of these figures and it is not an unfair one. This also 

is reflected in expectations about the cost of providing new sanitation and sewage treatment services. 

To halve the proportion of people without a safe water supply by 2015, an estimated USD2billion to 

USD23billion per year would be required, depending on the approach taken in each particular case. 

Based on the provision of basic sanitation for the poor, USD2billion to USD17billion would be needed 

per year. The sheer range of these estimates suggests that they are not estimating the same 

outcomes. Currently total overseas development assistance (ODA), runs at USD53billion a year. The 

question here is: how much ODA will ever be directed at ‘unglamorous’ sectors such as water and 

sewerage? 

2003: Kyoto’s road to nowhere? 

There were 406 sessions at the World Water Forum in 2003. Of these, 12 sessions covered finance, 

along with 15 on the private sector and six sessions devoted to opposing private finance. There was 

one session on industry and water. It was no great surprise to find that no regional or national targets 

for water and sanitation coverage were considered. 

This sums up the piecemeal nature of 2003. In June 2003, the European Parliament sought to create 

a European Water Fund of EUR1billion from both public and private sources to fund water supply and 

purification in developing countries. Paul Lannoye MEP, the European Parliament’s Rapporteur on 

water management saw the proposed sum as inadequate and suggested that a tax of EUR0.005 on 

every bottle of mineral water sold in Europe. 

In May 2003, The Group of Eight’s (G8) “Water Action Plan" called for efforts to secure more safe 

drinking water but declined to provide funds. The G8's offered to support countries that prioritised safe 

drinking water. The G8 added they would promote public-private partnerships (PPPs), where 

appropriate. There has been no official development of this plan since this date. 

What aid there is does not to appear be going where it is needed most. A survey carried out for the 

OECD in 2002 (OECD (2003) Aid activities in the water sector 1997-2002, OECD Paris, France) found 

that 12% of all aid going to the water sector that year went to countries where less than 60% of the 

population had access to safe water. Annual aid going into water is some USD3billion, with another 

USD1.5billion in loans. The largest donor is Japan, which gives 33% of total water aid and has an 

extended loan programme to complement the funding. 

2004-05: Meeting these goals – already a cause for concern 

In 2004, the first surveys commissioned by the UN towards these goals were published and they 

indicate that there is already slippage from the intended targets. This is especially noticeable in Africa 

and South Asia. 

Progress in water and sanitation coverage, 1990-2002 


Sanitation 

% served 2002 1990-02 2002 1990-02 

Western Asia 88% +5% 79% 0% 

Latin America & Caribbean 89% +6% 75% +6% 

Northern Africa 90% +2% 73% +8% 

South Eastern Asia 79% +6% 61% +13% 

Oceania 52% +1% 55% -3% 

Eastern Asia 78% +6% 45% +21% 

South Asia 79% +13% 37% +17% 

Sub-Saharan Africa 58% +9% 36% +4% 

Sanitation coverage, interim progress and targets 

Source: WHO / UNICEF, Mid-Term Assessment of Progress, 2004 

People in urban areas who need to gain access to safe water or sanitation services by 2015 

Million people Water Sanitation 

Eastern Asia & Pacific 290 330 

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South Asia 243 330 

South-Eastern Asia 115 208 

Latin America & Caribbean 121 132 

Former Soviet Union 27 24 

Total 961 1,032 

Source: UN Millennium Project Task Force on Water & Sanitation, Interim Report, 2005 

2005: The UN ‘Water for Life’ decade and World Water Forum 4 (WWF4), Mexico 2006 

The United Nations International Decade for Action, “Water for Life”, 2005-2015 was launched at 

World Water Day, 22 March 2005. The Decade for Action is designed to highlight the disparity 

between progress to date and the work needed to attain the water and sanitation MDGs as highlighted 

in the 2004 study by UNICIEF and the WHO. Again, the UN explicitly recognises the contribution 

needed from the private sector to attain these goals. The Fourth World Water Forum was held in 

Mexico City in March 2006. Unlike at Kyoto, the meetings on financing water were not physically 

broken up by protestors, but it did highlight how limited has been the engagement between the private 

sector and various stakeholders for the implementation of effecting management strategies. 

Towards 2015 and 2025: Industry Initiatives Noted 

World Business Council on Sustainable Development 

In March 2004 the World Business Council on Sustainable Development (WBCSD) launched a two 

year council project on water to define the business contribution to the debate. 

WBCSD (2004). Water and sustainable development: a business perspective. 

WBCSD (2005). Water facts and trends. 

WBSCD (2005) Collaborative actions for sustainable water management. The role business can play 

as an active stakeholder in collaborative processes for water management. World Business Council 

for Sustainable Development, Geneva, Switzerland 

WBSCD (2006) Business in the world of water: WBCSD Water Scenarios to 2025. World Business 

Council for Sustainable Development, Geneva, Switzerland 

PSP Water 

‘Policy Principles and Implementation Guidelines for Private Sector Participation in Sustainable Water 

Supply and Sanitation Services’ launched in April 2004 by the Swiss Agency for Development and 

Cooperation (SDC), the Swiss State Secretariat for Economic Affairs (SECO), and Swiss Re. PSP 

Water seeks to propose formal approaches for private sector participation (PSP) at the policy, 

operational and practitioner level, based on work being carried out since 2002 (web site 

www.partnershipsforwater.net). The first drafts were published in April 2005. 

PSP Water (2005) Policy Principles: Framework for sustainable partnerships 

PSP Water (2005) Implementation Guidelines: Manual for sustainable municipal water services 

Global Water Scoping Process 

Jointly developed by ASSEMAE (Brazilian Association of Municipal Water and Sanitation Public 

Operators), Consumers International, Environmental Monitoring Group, Public Services International, 

RWE Thames Water, BPD and WaterAid. A scoping report has been published and a workshop held 

in Berlin in June 2004 decided that this project is to be taken further. Meetings and dialogues have 

subsequently been held, but no significant new research has been identified. 

Urquhart P. & Moore D. (2004). Global Water Scoping Process: Is there a case for a multi-stakeholder 

review of private sector participation in water and sanitation? 

Business Partners for Development 

438 



BPD is British based, with a global membership. The Water and Sanitation Cluster covers water and 

wastewater issues. A Tri Sector Partnership approach developed in a 1998-2001 study, looking at the 

potential of business working with governments and civil society for promoting sustainable 

development. A series of five brief reports were published in 2002. BPD is concentrating on 

developing partnerships at the local level. 

Evans B., McMahon J. & Caplan K. (2004) The Partnership Paperchase: Structuring Partnership 

Agreements in Watyer and Sanitation in Low-Income Communities. 

Brocklehurst C. (in preparation) Local Management Models for Water Supply and Sanitation for the 

Urban Poor 

Stott L, & Keatman T (in preparation) Tools for Exploring Community Engagement in Partnerships 

Newborne P & Caplan K (2006) Creating Space for Innovation: Understanding Enablers for Multi- 

Sector Partnerships in the Water and Sanitation Sector 

Trémolet, S (2006) Adapting regulation to the needs of the poor: Experience in 4 East African 

countries 

Schaub-Jones, D, Eales K, & Tyers L (2006) Sanitation partnerships: Harnessing their potential for 

urban on-site sanitation 

Valfrey-Visser, B, Schaub-Jones, D, Collignon B & Chaponnière, E (2006) Access through innovation: 

Expanding water service delivery through independent network providers: Considerations for 

practitioners and policymakers 

The World Economic Forum 

The WEF’s Water Initiative was launched in June 2003. It covers three areas: The Water Project 

Exchange (joint projects between the private sector and other stakeholders); The Water Practices 

Exchange (highlighting good corporate practice in water management) and; The Water Business Case 

(promoting market based instruments for water and watershed management). 

WEF (2005) Development-Driven Public-Private Partnership in Water: Emerging Priorities from the 

Second Roundtable Discussion 

The Green Globe Network 

The Green Globe Network assists UK Government’s international sustainable development activities 

by providing advice and information, organising meetings and seminars, and by developing proposals 

for new policy initiatives. It was established in 1997 by the Foreign Secretary and is funded by the 

Foreign and Commonwealth Office. It also has links with other government departments. The water 

and sanitation Millennium Development Goals were taken on as part of their 2003-04 work 

programmes. The Green Globe Network is run by the Green Alliance. 

The Fourth World Water Forum: Smaller visions, greater realisations 

The 2006 World Water Forum in Mexico City represented progress of sorts. When Jose Angel Gurria, 

the former Mexican Finance Minister and Director General designate of the OECD presented his ‘Task 

Force on Financing Water for All’ report, the session was briefly disrupted by hostile chanting. In 

contrast, Michel Camdessus’ session at Kyoto three years earlier ended in chaos after eight minutes 

as a room packed with pre-warned journalists witnessed a stage invasion worthy of a British football 

match in its 1980s hooligan heyday. Certainly, security was tighter, but perhaps expectations on all 

sides are lower as reflected by WWF4’s theme of ‘local actions for a global challenge’. 

Looking back, the Camdessus panel realised that they have ‘not been good political communicators’ 

not least because nobody asked them to be this in the first place. They did however manage to create 

a conceptual framework for developing financial strategies and policies, which the Gurria Task Force 

has sought to sell to the developed countries through proposals based on realisable objectives. The 

emphasis on preparing a broad range of case studies here is a good start as they demonstrate what 

can be achieved through Sub-Sovereign Debt initiatives. 

This also means that whatever the purists say, water services need to be able to cover their operating 

costs and to finance debt. The 1992 Dublin Statement recognising water as an economic good and its 

439 



universal access as a human right holds good today. It also recognises that private finance supporting 

municipal water projects is a quite separate issue from the private sector owning or operating 

municipal water assets. 

The various presentations in the run up to, during and follow ups from WWF4 demonstrate that for 

developing countries, funding and the capacity needed to put this to effective use remains a critical 

issue. 

The Fifth World Water Forum: Who knows? 

Preparatory work is well under way for the Fifth WWF to be held in Turkey in March 2009. The lack of 

public corporate engagement has been generally noticeable, perhaps reflecting changed priorities in 

recent years. Given the rate of progress on various fronts, it is to be hoped that the private sector will 

be treated in a more mature manner than in recent years. 

Official Development Assistance remains a subject for dry humour 

Official Development Assistance (ODA) from the OECD nations via its Development Assistance 

Committee (DAC) to less developed economies has fallen as a percentage of the DAC members’ 

Gross National Income from 0.33% in 1992 to 0.22% by 1997, partially recovering to 0.26% by 2004. 

By 2010, it is anticipated to rise to 0.36%. The DAC anticipate ODA rising to USD130billion by 2010 

but no decisions have been made as to the relative priority of water and sewerage projects within this. 

Total DAC water-related ODA commitments fell from an annual average of USD3,161million in 1999– 

2000 to USD2,706million in 2001–02 (country commitments falling from USD2,569million to 

USD1,692million, with those from multilateral institutions rising from USD592million to 

USD1,014million over the same period). Actual disbursements by countries rose from an annual 

average of USD2,404million in 1999–2000 to USD3,038million in 2001–02 (country data only is 

available, Source: OECD (2004) Aid for Water and Sanitation, OECD, Paris). Given the lag between 

commitments and disbursals, the USD2billion in extra ODA committed between 2002 and 2004 will not 

be felt until 2010–12. 

OECD commitments and disbursements for water projects, 2002–04 (USDm, %) 

Average spend pa Commitments Disbursements 

2002–04 USDm % USDm % 

Policy & administration 1,057 17% 298 12% 

Water resources protection 118 2% 43 2% 

Watsan - large projects 2,467 41% 1,021 40% 

Watsan - small projects 766 12% 383 15% 

River development 206 3% 138 5% 

Education & training 22 0% 15 1% 

Wastewater treatment 214 3% 71 3% 

Agricultural resources 931 15% 289 11% 

Water transport 417 7% 274 11% 

Total 6,198 2,530 

Source: OECD DAC Database 

ODA commitments for large systems water and sanitation projects peaked at USD2.1billion (2003 

dollars, five-year moving average) in 1998 before falling to USD1.6billion in 2000, recovering to 

USD1.8billion in 2002. Although there was a significant increase in 2004, the overall increase since 

1990 has not matched population growth in the less developed economies. (Source: World Water 

Council (2006) Official Development Assistance for Water from 1990 to 2004, WWC, Geneva) 

Africa remains the greatest challenge 

In real terms, Official Development Assistance (ODA) for water projects in Africa since 1992 have 

varied between USD900million and USD1,100million per year, with the only increase during that 

period seen amongst the Least Developed Countries. Although overall global ODA has increased 

since 2000, and is promised to rise further by 2010, no promises have been made as far as water 

funding goes. 

440 



There is a depressing tendency for this to get misappropriated, meaning even less is done and donors 

are discouraged. Only anecdotal data is available, but Transparency International believes that 

anything up to 60% of operations and management costs can be absorbed by corrupt practices where 

water is managed by unaccountable municipal entities. Such a mighty degree of malpractice depends 

on a culture of compliant collusion, where funding flows are not subject to scrutiny. This is found where 

a utility does not need to fund itself through recovering its own costs, but depends on cross subsidies 

which are unrelated to service delivery. 

There is an increasing reluctance just to disburse ODA funding at projects in the hope that they will 

look after themselves. At the same time, conditions are generally pretty unattractive for private finance. 

Hopes that the structured finance concept can deliver in the region are not well founded. Currently, 

only Cote d’Ivoire, Senegal and parts of Uganda have effective cost recovery policies for urban areas. 

Despite negative publicity, long standing contracts in these West African countries appear to be 

working, as have local contracts in Uganda. In each case, there is a reasonable amount of cost and 

performance data in the public domain, allowing people to query where their money goes. These 

‘windows of transparency’ (see the Appendix for illustrations) grind away at the fiscal slack the 

corruption depends on. They also create a climate of confidence that may encourage further funding 

flows. While it is sadly unlikely that the water and sanitation goals will be met in most of Africa, hope 

lies in the lessons to be learnt. 

Globally, there is much to do 

The World Health Organisation and UNICEF didn’t mince their words in their report on ‘Meeting the 

MDG drinking water and sanitation targets’ in September. This coverage figures up to 2004 and 

makes it pretty clear that much needs to be done in urban areas if these targets are to be met, let 

alone in rural areas. Even though the number of people unserved is meant to be halved between 2000 

and 2015, population growth and political inertia in urban areas is clearly outweighing many urban 

service provision initiatives: 

Urban people with access to improved services (Global) 

Million people 1990 2004 2015 


Served 2,172 2,933 3,648 

Unserved 107 170 240 

Sanitation 

Served 1,804 2,502 3,176 

Unserved 475 611 692 

Source: WHO (2006) Meeting the MDG drinking water and sanitation targets 

Urban demand for access to safe watsan services by 2015 (million people) 

Water Sanitation 

Eastern Asia & Pacific 290 330 


South Asia 243 263 

South-Eastern Asia 115 208 

Latin America & Caribbean 121 132 

Former Soviet Union 27 24 

Total 961 1,032 

Source: UN Millennium Project Task Force on Water & Sanitation, Interim Report, 2005 

It is also evident that major projects cannot hide neglect in secondary cities (water coverage in the 

Philippines fell from 95% to 87% between 1990 and 2004, despite the transformation of Manila’s 

services), while bulk water treatment and provision projects need to be pushed further down the pipes 

(a fall from 99% to 93% water coverage in China). 

The most encouraging aspect of this report has been the gradual diminution of official 100% (or for the 

ultra realists, 99%) coverage rates, no matter how bleak other realities appear to be. Even so, it is 

unlikely that Zimbabwe really offered ‘just’ a 98% water coverage rate in 2004 against 100% in 1990. 

Expect further progress (or rather, regress) here as the 2015 targets start to loom. 

Taking one example, India: 

441 



WHO 2004 Report 1990 2002 

Urban drinking water access 88% 96% 

Household connections 51% 51% 

WHO 2006 Report 1990 2004 

Urban drinking water access 89% 95% 

Household connections 53% 47% 

There is some significant slippage between these two yearly surveys, in turn suggesting a change in 

methodologies and mindsets and the cooler realisation that international largesse is becoming 

increasingly results oriented, which means that being bleakly honest about matters past and progress 

to the present does at least open up the prospect of future improvement, as long as those fickle 

sources of funds can be harnessed. 

Along with the fear of losing face (while trying to attract foreign funds, always a subtle balancing act), 

there are the shifting sands of defining what ‘access’ means in the first place. There is a bare honesty 

about the household access data. In India, urban access means one standpipe per 30 households, or 

one every 162 people, while in the developed world, it means water delivered to your property. While 

overall access varies between countries and surveys, there is far less room for ambiguity about having 

a functioning tap within each household. 

Urban households with individual access to improved water supplies 

% Household connection 1990 2004 

Developed world 99% 99% 

Developing world 70% 70% 

Northern Africa 83% 92% 

Sub-Saharan Africa 45% 36% 

Latin America 85% 90% 

Eastern Asia 82% 87% 

Southern Asia 56% 50% 

Western Asia 83% 94% 

Sub-Saharan Africa and Southern India are in severe danger of being left behind the rest of the 

developing world, unless profound remedial action is taken over the next 9 years, along with some 

commitment to meeting the World Water Visions’ 2025 target of universal water and sanitation 

coverage. 

Getting the funding together 

Water projects remain riskier than almost all other forms of capital intensive projects. Between 1990 

and 2005, 39% of all projects involving World Bank funding were either cancelled or in a risk position. 

The cancellation of the various Argentinean concessions during 2006 will not have helped this. Even 

so, the ongoing quality of the portfolio has improved more rapidly than any other sector, perhaps due 

to the lessons learnt from the loans of the 1990s, especially that foreign exchange rate collapses do 

happen and they have to be taken seriously when local people have to pay for their consequences. 

Sector 1995 2000 2005 

World Bank overall 30% 15% 14% 

Infrastructure 28% 15% 10% 

Water & Sanitation 49% 14% 9% 

Source: World Bank, (2005) Water Supply and Sanitation Lending: Volume Rises, Quality Remains 

High, Water Supply and Sanitation Feature Stories, Washington DC, USA 

There is a general commitment from the various development banks to increase funding in the sector, 

but this funding is increasingly tied to higher expectations about operational reform and cost recovery. 

Thus the higher funding outlined below remains dependent on institutional reform and capacity 

building. 

Water & sewerage disbursements (USDmillion pa) 2000-05 2006-10 

World Bank 1,280 2,500 

African Development Bank 70 200 

442 



Asian Development Bank 790 2,250 

European Bank for Reconstruction & Development 75 150 

Inter American Development Bank 200 400 

Problems 

NGO and political pressure 

Opposition towards the private sector by NGOs has been extensive. This has partly arisen through the 

conflation of a right to water as a human right with the right to free water (see Barlow & Clarke 2002 

and Barlow 2007), along with opposition to globalization (e.g. Brennan at al 2004) and private sector 

participation per se (summarised by Hall & Lobina 2006). While no firm evidence exists of any of these 

campaigns resulting in a concession being rescinded in developing economies, this may have been a 

contributory factor in Cochabamba and La Paz & El Alto in Bolivia. 

Contract instability 

The World Bank has been involved with 522 water & sewerage projects in 58 countries between 1990 

and 2006 (World Bank 2007). The 54 cancelled or distressed contracts at the end of 2006 represented 

10% of contracts and 31% by value. The distress level of 31% compares poorly with Electricity (10%), 

Telecoms (4%) and Transport (11%). The quality of the overall water and sanitation portfolio has 

improved during this time, with 49% of projects by value being identified as cancelled or at risk in 1995 

against 28% for infrastructure overall, falling to 9% in 2005 against 10% for infrastructure overall 

(World Bank 2005). 

The threat of a contract being rescinded has become a material disincentive for the international 

players, especially since 2000. 43 contracts serving a total of 47.9million people which have ended 

have been identified. In 11 cases (3.6million people) this was at the end of the contracts agreed life, 

while in the other 32 cases (44.3million people) contracts were ended either by the operating company 

or the municipality. In population terms, 14% of contracts have been rescinded; 2% of contracts 

awarded to local companies, 15% to regional companies and 23% for TNCs. All three rescinded 

contracts in the least developed economies (1.1million people) had been awarded to TNCs. 

Having the wrong contract in the wrong place 

Impossible conditions, such as unrealistic demands being placed upon current and future customers 

(even when the bidder does not appreciate these at the time) are not an encouragement for further 

investment. These can be particularly important when seeking to make a concession politically 

acceptable. In Buenos Aires, under Argentinean law, if a consumer was within a certain distance of a 

pipeline, they were obliged to connect to it (Lindfield, 1998) which led to the perception in some cases 

that these services were being imposed on poor areas. 

In Bolivia, contract conditions were even more divisive. The Cochabamba concession attracted a 

single proposal, which was then developed through negotiation (World Bank & PPIAF, 2006). Aguas 

de Tunari was awarded the concession in October 1999 with the concession starting in January 2000. 

Law 2029 meant that the concession covered all water resources in its area and all actual and 

potential customers had to connect to the system and well owners were obliged to use the company’s 

water irrespective of their ability to pay (Castro, 2006). No public consultation was taken either over 

the law or the concession process (Slattery, 2003). Contract disputes were to be dealt with through the 

International Centre for the Settlement of Investment Disputes, the International Chamber of 

Commerce and the United Nations Commission on International Trade Law (Castro, 2006). 

Regulators, dispute mechanisms and dealing with poor data 

The Aguas Argentinas contract was based on performance targets (connections, levels of service, 

metering) rather than capital spending. A price formula was drawn up, which would be reviewed every 

five years (Lindfield, 1998). But ETOSS was staffed by former OSN employees and not formally 

qualified for their new roles. It has been suggested that the monitoring process was politically 

motivated (Zerah and Graham, 2001). 

In 1994, a tariff rise of 13.4% was imposed because the infrastructure condition was found to be worse 

than expected. Since 1996, AA and ETOSS went into a series of contract renegotiations over bill 

collection and charging. By 2001, it appears that AA was experiencing financial problems and from 

2001, ETOSS imposed a series of fines relating to AA’s performance as the company reduced 

spending in the wake of the 2001 economic crisis and the 2002 peso devaluation. Between 2003 and 

443 



2005, further renegotiations took place but were inconclusive and the contract was handed back in 

2006 (Castro, 2006). 

Foreign exchange risk 

It is surprising that some highly reputable companies, with a long track record in international business 

have run into major difficulties with foreign exchange risks. The inability to avoid these losses reflects 

a fundamental tension between using a TNC to attract hard currency debt and the TNC having to use 

soft currency tariff revenues to service this debt. The argument that foreign exchange crises are 

exceptional is facile, as they have affected TNC concessions in Argentina, Indonesia and the 

Philippines, amongst others. 

The unexpected 

The best two examples involve sewerage and sewage treatment concessions in Malaysia and 

Thailand. They are relevant for the water sector as the operators are the same and the perceptions 

likewise. In Malaysia, a recession meant that in order to stimulate the economy, price restraints were 

imposed on the contract making it unviable. In Thailand, operational constraints (allowed working 

hours) were imposed on the contract, along with a revised specification (more infrastructure work than 

anticipated), which led to exceptional losses. 

References: 

Barlow M & Clarke T (2002) Blue Gold: The Fight to Stop the Corporate Theft of the World’s Water. 

The New Press, NY, USA. 

Barlow M (2007) Blue Covenant: The Fight for Water as a Human Right. Toronto, McClelland & 

Stewart 

Brennan B., et al (2004) Reclaiming Public Water! Participatory alternatives to privatization, TNI 

Briefing Series 2004/7, TNI, Amsterdam, The Netherlands 



Hall, D. & Lobina, E. (2006) Pipe dreams: The failure of the private sector to invest in water services in 

developing countries. World Development Movement / PSIRU, London, UK 

Lindfield M R (1998) Institutions, Incentives and Risk Preparing Markets for Private Financing of Urban 

Infrastructure. The Australian Housing and Urban Research Institute. Brisbane, Queensland University 

of Technology / Erasmus University Rotterdam 

Slattery K (2003) What Went Wrong? Lessons from Cochabamba, Manila, Buenos Aires, and Atlanta. 

Water & Wastewater Annual Privatization Report, The Reason Foundation. Los Angeles USA 

World Bank (2007) Private activity in water sector shows mixed results in 2006. Public-Private 

Infrastructure Advisory Facility, World Bank, Washington DC 

World Bank (2005) Water Supply and Sanitation Lending: Volume Rises, Quality Remains High, Water 

Supply and Sanitation Feature Stories, Washington DC, USA 



Zerah M H & Graham K (2001) The Buenos Aires Concession: The Private Sector Serving the Poor. In 

Asia, WASP-S. (Ed.) New Delhi, WSP. 

Some new approaches considered 

New approaches: Making sub-sovereign debt a viable proposition 

Sub-sovereign entities in developing economies, such as municipal water utilities, have considerable 

problems in raising debt funding for infrastructure extension and upgrading, because neither they nor 

their municipality are likely to have a credit rating. This means that funding is either unavailable 

(making companies dependent on ODA) or municipal/state funding) or very expensive as it has to be 

raised either from bank loans or from unrated debt issues. In addition, their relatively small size means 

that the credit rating and fundraising process is also expensive and any bonds so raised will face 

liquidity problems. Local government bond issues are very rare in developing economies, even when 

denominated in local currencies. Their high coupon makes the financing of their repayment more 

challenging. For example, municipal bonds in India (except for Hyderbad in 2002, AA+ rated with a 

coupon of 7.00%) have a coupon of 11.50–14.75%. 

444 



Both the Camdessus and Gurria reports look at the potential for multilateral institutions, such as the 

development banks, to play a role in bringing in domestic private capital for infrastructure finance. The 

Camdessus Panel Report identified the need for new sources of municipal project finance with 

guarantees for projects with capital spending in the region of USD0.1–100million. A number of 

municipal water and sanitation project financing initiatives have been developed to date. The World 

Bank through the IFC and related initiatives is seeking to develop sub-sovereign debt support. USAID, 

the US ODA entity is also recognised as a significant partner in these initiatives. 

New approaches – learning to live with risk 

The first step for financiers and investors is to get to know the sub-sovereign debt markets outside 

Western Europe and North America. The EBRD is an example. Since 1991, it has always been 

allowed to lend to sub-sovereign entities. Between 1997 and 2003, it fundamentally altered the nature 

of its central Europe and Russia infrastructure portfolio: 

EBRD – structure of central Europe and Russia portfolio, 1997 and 2003 

Portfolio 1997 2003 

Sovereign 82% 37% 

Municipal 16% 36% 

Private 2% 27% 

Source: EBRD 

This shift has been reflected in its Municipal & Environmental Infrastructure loan portfolio where 

significant loans are being extended towards sub-sovereign entities. This has been important in raising 

the profile of such lending, but these markets are decidedly at the advanced end of the developing 

economies. 

New approaches – pooled finance in the Philippines 

When projects are too small for funding, pooling them helps to drive down administrative costs and 

provides a more attractively-sized bond. In the Philippines in 2003, the Land Bank of the Philippines 

developed the Water District Development Project (WDDP), a local dedicated fund for water and 

sanitation projects. The driver behind the fund was to enable local municipalities to raise finance for 

capital projects by applying to a common pool of funds to reduce their costs. USD36.3million was 

raised with a 12-year term and a coupon of 12% with a 0.25% per annum commitment fee. At least 

10% of the project equity has to be raised by the municipality and the WDDP provides technical 

assistance. 

By June 2003, 13 projects obtained loans of USD27.6million, ranging from USD0.4million to 

USD7.6million. Individual projects currently have to pay the Land Bank interest at 15% pa, implying a 

decrease in the debt coupon of 3% being gained through project pooling. Pool financing is also a risk 

management tool, as it allows for the diversification of risk through a group of similar projects and 


New approaches – innovative bond structures in India 

Tamil Nadu in India has seen a series of initiatives designed to take the pooled finance concept a 

stage further by enhancing the credit rating of the project pool through structuring the debt to provide a 

series of credit guarantees that can be used to create an investment grade product, with a significant 

reduction in the debt’s coupon. 

In 2002, USAID helped develop the Water and Sanitation Pooled Fund (WSPF), a bond that was 

partially guaranteed by USAID for providing water and sewerage infrastructure finance to seven 

municipalities in Tamil Nadu in India. Structuring the debt using a guarantee means that the bond was 

issued in Indian Rupees (eliminating foreign currency risk), had an enhanced credit status (AA 

investment grade ratings from two leading Indian rating agencies: L AA (SO) by ICRA and Ind AA (SO) 

by Fitch), with the bond’s repayment supported by a portfolio of loans on-lent to the municipalities, 

while pooling a number of projects reduced the bond issue’s transaction and rating costs and made 

the issue more attractive to investors. 

445 



Three levels of credit enhancement were used: 

1. The escrow of the property tax and other collections made by the municipalities, covered 

under a tripartite agreement among the WSPF, municipalities and their banker; 

2. A Debt Service Reserve Fund, called the Bond Service Reserve Fund (BSRF), was set up by 

the government of Tamil Nadu with liquid investments of INR69million; 

3. A guarantee issued by USAID to the extent of 50% of the principal, with the balance covered 

by an undertaking by the Government of Tamil Nadu, in the form of a government order that 

the shortfall would be replenished by the Government of Tamil Nadu to the BSRF by 

deducting their respective share of State Finance Commission (SFC) funds accruing to the 

municipalities involved. 

The bond had an issue size of INR304.1million and a coupon of 9.20% pa, with a tenor of 15 years, 

carrying a put and call option at the end of the 10th year. The bond is to be redeemed in 15 equal 

annual instalments with an annual payment of coupon on a diminishing balance method. 

Subsequent events have shown this concept remains a work in progress. For example, the monthly 

municipal repayment mechanism did not take into account the effect of the monsoon season on 

repayment scheduling. Even so, the WSPF has set an encouraging precedent. Similar bonds have 

been developed in Chennai and Karnataka, each raising USD22million. There is room for flexibility 

with the escrow accounts, as individual municipalities can select the most effective repayment revenue 

source – water bills, electricity bills, rental or tax income, for example. The figure below outlines the 

relationship between funding sources for a structured obligation. 

From this, it is evident that structuring can be used to enhance credit quality, especially when allied 

with the optimum use of credit enhancement (limited funds need to be disbursed with care) and that 

they need credit enhancement by multilateral agencies or the government. The structured obligation 

operates through the escrowing of dedicated revenue streams from the municipalities. A full guarantee 

from an entity with superior credit profile needs to be allied with a partial guarantee mechanism for 

pledging of cash collateral and partial guarantees covering the amount raised, its tenor and interest 

rate. 

Structured finance enables ODA to act as a catalyst for municipal water and sewerage infrastructure 

projects, with the total guarantee funding supporting approximately three times of private sector 

investment in bond issues. 

Spreading the word - International initiatives 

The World Bank, IFC and regional development banks all support such initiatives, principally through 

supplying finance for the national municipal funding agencies. The active development of structured 

and pooled financing has been pioneered by USAID and more recently by Japan’s ODA organisation, 

the Japan Bank for International Cooperation (JBIC) and the UK’s DfID. The challenge is to mobilize 

enough new funding for these good ideas to make a greater difference. 

New approaches: Driving down the cost of capital spending 

The scope for technical innovation in delivering basic services appears to be limited. Yet there is a 

great deal to be done, especially in developing devolved technologies and making systems operate 

more efficiently so that technological innovations allow funding to go further. At one end, this involves 

the rehabilitation and upgrading of extant systems (remote water metering and pipeline monitoring and 

rehabilitation systems), while upgrading their treatment capabilities (devolved, non chlorine based 

forms of drinking water treatment such as low maintenance UV systems and the application of 

electrodes), along with efficient methods of introducing appropriate and upgradeable forms of water 

and wastewater treatment and recovery. 

The latest figures provided by the UN (the UN Millennium Project Task Force on Water & Sanitation, 

2005) include an assumed 15% for overheads & unspecified O&M costs, implying that capital 

spending costs account for 60-80% of the figures for sanitation and sewage treatment services cited 

below: 

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New service connection 

USD per 

person 

Improved traditional practice 10 

Simple pit latrine 45 

Ventilated improved pit latrine 65 

Pour-flush latrine 70 

Septic tank 160 

Sewer (local labour) 175 

Conventional sewer 300 

Sewerage and secondary treatment 450 

Sewerage and tertiary treatment 800 

In fact, for medium to larger cities, the western experience shows that the cost of sewerage and 

secondary and tertiary treatment is more likely to be in the range of USD350-500 per population 

equivalent (PE). Much of the disparity is due to the relentless drive for lower costs in countries such as 

the UK. In Europe, using the private sector to develop sewage treatment assets has driven down 

capital costs by 15-40% since the early 1900s. 

It is also clear that labour costs are a significant element in the laying of basic infrastructure and need 

to be factored into regional estimates. For treatment facilities, differences in labour costs are less 

significant as most of the costs are taken up by equipment. 

The World Health Organization’s ‘Global Water Supply and Sanitation Assessment 2000 Report’ 

(WHO, Geneva, 2000) used the following capital spending estimates for its projections. Capital 

spending costs only: 

USD per capita Africa Asia Latin America 

Water House connection 102 92 144 

Standpipe 31 64 41 

Sanitation Sewer connection 120 154 160 

Small bore sewer 52 60 112 

Septic tank 115 104 160 

NGO estimates for connecting urban water and sanitation projects 

USD per 

capita Mali Burkina Faso Niger Nepal Tanzania 

Water 106 104 88 40 150 

Sanitation 41 46 22 45-95 50 

Sources: 

Mali: ISW (2005) Blue book Mali, ISW, Montreal, Canada 

Burkina Faso: ISW (2005) Blue book Burkina Faso, ISW, Montreal, Canada 

Niger: ISW (2005) Blue book Niger, ISW, Montreal, Canada 

Nepal: WaterAid (2004) The Water & Sanitation MDGs in Nepal, WaterAid, Nepal 

Tanzania: WaterAid (2005) USD2 billion dollars, the cost of water and sanitation MDGs for Tanzania, 

WaterAid, UK 

The per capita cost of water and sewage treatment facilities is related to their size, so comparative 

data has been restricted to the medium to large scale facilities found in larger towns and cities (more 

than 100,000 people). 

Treatment facilities (USD per capita) 

Range 

Water 20 - 100 

Sewage treatment (primary) 20 - 60 

Sewage treatment (secondary) 150 - 180 

Source: Envisager 

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The private sector has a broad remit for driving down costs. Small bore sewerage networks built with 

local labour in El Alto, Bolivia between 2000 and 2002 under AISA, the concession managed by Suez 

until this year cost USD90 per capita. Given the contentious nature of private sector participation, it 

remains likely that more expensive municipally operated approaches will usually be adopted. 

In per capita terms, improving urban water, sewerage services and wastewater treatment ought not to 

exceed USD100-140 per capita, while providing these services from scratch should not cost more than 

USD300-450 per capita, less USD120-160 without full wastewater treatment. Suez has been able to 

provide basic water and sewerage services in Latin America for USD100 per capita. Rural service 

provision is appreciably cheaper, concentrating on the ready availability of water a short distance from 

each house, along with sanitation and effluent recovery and composting systems. 

448 


APPENDIX 4: GLOSSARY OF WATER AND FINANCE TERMS AND ABBREVATIONS 

APPENDIX 4: 

GLOSSARY OF WATER AND FINANCE TERMS AND ABBREVIATIONS 

449 


APPENDIX 4: 


GLOSSARY OF WATER AND FINANCE TERMS AND ABBREVIATIONS 

Abstraction. The taking of water from surface water (rivers, lakes and reservoirs) and groundwater 

(boreholes and springs from water bearing rocks such as chalk, limestone and sandstone). 

Acre-Feet. Expression used in the USA to describe groundwater resources. 1 acre foot = 1.482 Ml 

(1,482 m 3 ) 

ADB. African Development Bank / Asian Development Bank. The former is sometimes known as the 

AfDB and in general are not to be confused with each other. 

Affermage. See Lease. 

AMP. Asset Management Period, the five yearly operating cycles in England and Wales set out by 

Ofwat, the industry regulator since 1989. AMP4 runs from 2005-10. 

Ammoniacal nitrogen (NH 3 ). Ammoniacal nitrogen is often found in water as a result of the 

discharge of sewage effluent with high levels affecting the quality of fisheries. 

Aquifer. Rock and soil which holds water, an underground water source for groundwater. 

Artesian. Water abstracted from groundwater resources. 

ASEAN. Association of South-East Asian Nations. 

Asset Sale. The full privatisation of utility services via the outright sale of their assets and an 

operating licence to shareholders or to a private sector company. This is known as the ‘British Model’ 

after the 1989 privatisation of the WASCs of England and Wales. Placing the operating assets in 

private hands in perpetuity has proved politically very contentious and, as a result, has not been used 

elsewhere, save in Chile and to a lesser extent, in the Czech Republic and in Belize. 

ATO. Ambito Territoriale Ottimale. The ideal area for water and wastewater contracts in Italy as 

designated by the 1994 Galli Law. This law broadly seeks to rationalise some 6,800 water distribution 

regions into a more manageable 89. 

BATNEEC/BAT. Best available technology not entailing excessive cost/Best available technology. 

The former’s expediencies have earned it the nickname CATNIP, or cheapest available technology not 

involving prosecution. 

Biosolids. The new expression for sewage sludge which has been processed for recycling. The latter 

refers to its application on agricultural land or after further treatment, as compost sold for horticulture 

and domestic gardens. As far as PR goes, a better term than refined human excreta. 

Biotic. Plant, bacterial or animal life. Biodiversity refers to the optimal diversity of species in an 

ecosystem. The greater the number of species in a given ecosystem in relation to its ideal number, the 

less perturbed the habitat is. 

Blue Flag. Under the EU’s bathing waters directive, designated bathing areas that meet the stricter 

‘Guideline’ standard for water quality, as well as satisfying standards for safety, can be awarded a 

‘blue flag’. 

BMO. Build, manage, operate, a form of O&M contract. 

BOD/COD. These are chemical/biochemical determinants of water quality. As plants and animals do 

not necessarily respond to numbers and engineering standards, there is a move towards 

complementing these criteria with a biological assessment of the water’s quality. For example, in 

several families of invertebrates, better water quality results in a greater degree of species diversity. 

Indicator species are used to measure water quality. 

• Biochemical oxygen demand (BOD). This is the amount of dissolved oxygen in water consumed 

in test conditions over a period of five days by the microbiological oxidisation of biodegradable 

organic matter contained in effluent. BOD measures the amount of oxygen consumed, usually by 

organic pollution (mainly sewage effluent and effluents from the wood and paper industry), so 

lower values indicate better quality. 

450 



• Chemical oxygen demand (COD). Unlike BOD, this includes all the oxygen consumed by 

effluents. 

BOT. See Concession. 

‘British Model’. See Asset Sale. 

CAO. Chief Accounting Officer. 

CAP. The Common Agricultural Policy of the European Union. 

Capex. Capital spending. Money spend on new assets or replacing or upgrading extant assets. 

Carcinogen. A substance which is believed to be a cause of cancers in humans. 

CEO. Chief Executive Officer. 

CFO. Chief Financial Officer. 

Coliform bacteria. Gut living bacteria that are discharged with excreta. Drinking water contaminated 

with coliform bacteria is the main cause of diarrhoea and other intestinal infections. The most useful 

indication that sewage effluent is being discharged into a body of water. 

Combined sewers. A sewer that carries both sewage and storm water runoff. 

Common Ownership. A form of privatisation where the operating assets are corporatised and a 

minority of the shares in the asset-holding company are offered to one or more private sector 

companies. This is known as Kooperationmodel or the German Model. A further variant is the 

Beteribermodell, where the private sector operator pays a fixed rate for the right to operate the 

services. 

Concession. The granting of the right to operate given utility services for a locality for an agreed 

period of time. Unlike outright privatisation (see Asset Sale), the assets are transferred to municipal 

ownership at the end of the concession’s life. In a full utility concession, the collection of water and 

sewerage tariffs is included. There are also four main variants of the concession model (BOO, BOT, 

TOT and BOOT) where tariff collection usually remains in municipal hands. These versions are 

typically seen where the municipality needs private sector finance and management for new facilities. 

• BOO (Build Own Operate). The private sector company builds, owns, maintains and operates 

the facility for the length of its operating life. 

• BOOT (Build Own Operate Transfer). Similar to the BOO contract, save that the private sector 

company hands over the assets to the municipality at the expiry of the concession. 

• BOT (Build Operate Transfer). Similar to the BOOT except that the private sector company 

hands over the assets to the municipality on completing construction work. 

• TOT (Transfer Own Transfer). Take over an existing facility, rehabilitate and subsequently 

operate it and hand over the assets to the municipality at the expiry of the concession. 

COO. Chief Operating Officer. 

Corporatised. A utility that is in municipal ownership while being run in a manner similar to that of a 

private sector entity. A corporatised utility will be structured as a limited liability company, with its share 

capital controlled by the municipality, while publishing the equivalent of an annual report replete with a 

profit and loss account, balance sheet and cash flow data. 

Cryptosporidium. Parasitic micro-organisms which live in water and are a cause of diarrhoea. The 

presence of ‘crypto’ is arguably an indicator of an under-maintained distribution network. 

CSD. Commission on Sustainable Development of the UN. 

DBFO. Design, Build, Finance and Operate. A form of BOT concession. 

DBO. Design, Build and Operate. A form of BOT concession. 

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DBOT. Design, Build, Operate and Transfer. A variant of the BOT contract incorporating the design of 

the facility. 

DfID. The UK Government’s Department for International Development, a government agency for 

promoting development initiatives. 

Digestion. Process for stabilising sewage sludge before application to land. Digestion involves 

heating the sludge to 40 o C to reduce the number of bacteria and pathogens. Anaerobic digestion (see 

Pasteurise) generates methane, which can be extracted for energy recovery. 

Distribution Loss. Non-contentious expression for leakage (q.v.) which also includes other losses 

including theft of water. 

Dry tonne. Sewage sludge or industrial effluent after all water has been removed. This is the 

standard measure used for comparing sewage sludge generation and disposal statistics. 

EBITDA. Earnings before interest, taxation, depreciation and amortisation. 

EBRD. European Bank for Reconstruction and Development. Loans for municipal and private 

services, with an emphasis on the EU candidate countries. 

Ecosystem. The community of organisms associated with a particular habitat. It ought to be noted 

that there is no such thing as ‘ecological’, as in ‘ecologically friendly’, since ecology is the science of 

studying the environment. Expressions such as ‘environmentally sound’ do, however, make sense. 

Effluent. Liquid wastes typically discharged into a body of water. Strictly speaking, it is the liquid 

discharged from a wastewater treatment plant into a body of water, which is meant to meet various 

quality criteria. 

EIB. European Investment Bank. Loans for municipal and private enterprises, priority within the EU. 

EPA. (National) Environmental Protection Agency. 

EU. The European Union’s directorate general for environmental issues is DG XI. The EU acts as a 

driver for and against water quality. In subsidising inefficient forms of industrial (intensive) agriculture, 

it is possible that the EU’s Common Agricultural Policy (CAP) does more damage to water resources 

than all of DG XI’s environmental initiatives combined. 

Eutrophication. The process by which lakes and ponds become enriched with dissolved nutrients, 

resulting in increased growth of algae and other microscopic plants. Nitrogen and phosphorous 

enrichment of water, which causes algal growth to extend beyond that associated with the particular 

aquatic environment. Degrades the quality of the ecosystem and impairs water quality. The main 

causes are industrial agriculture (fertilisers and slurry) and excess effluent discharges. 

Evapotranspiration. The removal of water from a surface through evaporation. 

FAO. Food and Agriculture Organisation of the United Nations. 

‘French Model’. Also known as affermage, (see Lease). 

Fresh water. Water that contains less than 1000 milligrams per litre of dissolved solids such as 

metals and nutrients. 

FY. Financial Year. 

GEF. Global Environment Facility (World Bank)/Global Environment Fund (privately held). 

‘German Model’. Also known as Kooperationmodel and the Beteribermodell (see Common 

Ownership). 

GDP. Gross domestic product – most effectively compared through using the Purchasing Power 

Parity tool, PPP. 

452 



Groundwater. The supply of fresh water found beneath the earth's surface (usually in aquifers) which 

is often used for supplying wells and springs. 

Groundwater recharge. The inflow to an aquifer. 

Habitat. United Nations Centre for Human Settlements (see UNCHS). 

Hague. The second world water forum, held in the Hague in 2000. Unveiled the 2025 target for 

universal water and sanitation provision, allied with greater private sector investment. 

IADB. Inter-American Development Bank. Development Bank primarily concerned with financing 

infrastructure projects in Central and South America. 

IFC. International Finance Corporation (World Bank, investment banking and privatisation). 

IMF. International Monetary Fund – encourages the sale of assets as part of state refinancing. 

Inset Appointment. Term for water provision contracts awarded to a new company within an 

incumbent company’s service area. A form of water service provision competition, mainly seen in the 

UK. 

IPO. Initial Public Offering, whereby a company’s shares are listed and subsequently traded on a 

recognised stock exchange for the first time. 

IPPC. Integrated pollution prevention and control regulates the discharges from industrial processes 

into the air, land and water. 

ISPA. Instrument for Structural Policies for Pre-Accession. EU funding for Accession Candidates, 

providing up to 75% of the cost of transport and infrastructure projects. 

IWRM. Integrated Water Resources Management. 

Johannesburg. The Second Earth Summit was held at Johannesburg in 2002. Targets to halve the 

proportion of people not connected to water or sanitation by 2015 were agreed. 

K. The percentage above (or below) the Retail Price Index that Ofwat allows a water company in 

England and Wales to alter its fees in a given year. This has evolved from the ‘RPI-X’ regulatory model 

pioneered by Oftel when British Telecommunications was privatised in 1984 and is an example of 

price driven regulation as opposed to the rate of return model used in the USA. 

Kyoto. The third world water forum was held at Kyoto in March 2003. Despite hopes that it would 

develop a framework to implement The Hague and Johannesburg proposals at the country level, little 

of substance took place due to NGO disruptions. 

L. Litre 

Leakage. Loss of water through the distribution system either at joins between pipes or due to cracks 

in pipes. Because the perceived wastage of water is a contentious subject, definitions of leakage rates 

tend to vary. Pipes are affected by cold weather (ice-cracking) and dry weather (subsidence) as well 

as structural deterioration. Approximately one third of leakage takes place within the customer’s pipe 

network. It is also affected by water pressure, leading to a pay-off between water supply pressure and 

leakage rates. 

Lease (Affermage). Privatisation model pioneered in France whereby the private sector company 

rents the assets from the municipality for a given length of time. The municipality is responsible for 

investment while the company does the tariff collection. In France, this evolved into a form of 

concession model, with the company carrying out an agreed programme of asset improvements over 

the life of the contract. 

M 3 . Cubic metre, or 1,000 litres. Measure of water volume. One cubic km is one million m 3 . 

Mains. Pipes that carry treated drinking water to the customer’s supply pipe via a connection pipe. 

Also called the distribution mains. 

453 



Management Contract. The simplest form of privatisation, where the private sector company 

provides management support for the operation of the assets. Usually seen as a means for the private 

and public sector entities to get to know each other. 

Mexico City. The fourth World Water Forum was held at Mexico City in 2006. A low key event, but 

one where issues about funding and meeting the MDGs were taken more seriously than in the past. 

MDG. The Millennium Development Goals were drawn up in 2000 and ratified in 2002 by the United 

Nations as a series of human development targets to be reached by 2015. The water and sanitation 

MDGs aim for a halving of people worldwide without access to safe water and sanitation by 2015. 

MENA. Middle East and North Africa. 

Ml/day. Megalitres per day (1,000m 3 per day). Measure of water availability. 

Monitoring Techniques. Monitoring needs to take greater account of water quality in biological, not 

chemical terms. Sometimes this is good for standards – lowland, slow flowing rivers can have low 

levels of dissolved oxygen – but usually this will mean tighter criteria. 

Mt/pa. Million tonnes per annum. 

MWA. Municipal Water Authority. The body controlling the water and wastewater service activities in 

Bangkok, Thailand. 

N/A. Not Available. 

Nitrates (NO 3 ). Nitrates are formed naturally in the soil by micro-organisms, but are also produced 

industrially and used as fertilisers. Nitrates are the nutrients, which in most saline waters control the 

production of algal growth with high levels of nitrates in the water causing eutrophication through algal 

and macrophyte growth. Furthermore 'blue baby disease', an affliction of the blood’s oxygen-carrying 

capacity, is associated with drinking water containing nitrogen in the form of nitrates. 

NGO. Non Governmental Organisation. 

Non-accounted for water. The proportion of water put into a system that does not end up being paid 

for either directly or indirectly. 

O&M (Operation and Maintenance). A step further from management contracts, but not a 

privatisation in the sense of a concession or asset sale. Here the private sector company operates and 

maintains the extant assets for a given period of time, but is not involved in the development of these 

assets or new facilities. 

ODA. Overseas Development Assistance. Infrastructure development aid. 

OECD. Organisation for Economic Co-operation and Development. Global grouping of 24 more 

developed economies. 

OFWAT. Office for water services, the water regulator for England and Wales. 

Opex. Operating expenditure. Money spent maintaining the extant infrastructure and using it to 

provide a service. 

PAH. Polyaromatic hydrates. A toxic industrial pollutant of increasing concern in EU and WHO water 

quality assessment criteria. 

Parastatal. A state held entity that operates at least nominally independently of the state. A 

Parastatal may also operate as a corporatised (q.v.) entity. 

Pasteurise. Sewage sludge which is more extensively treated than digested sludge (q.v.). After 

heating the sludge to 60 o C for several days, all pathogens and bacteria are removed, making it 

satisfactory for a wide range of agricultural applications. The main techniques are known as anaerobic 

digestion and composting. 

Pathogen. An organism which is capable of causing a disease. 

454 



PCBs. Polychlorinated biphenyls were mainly used for electrical transformers. They do not degrade 

and are understood to be carcinogens which can bioaccumulate (build up in an organism’s body, 

typically in fat reserves) to a dangerous degree. Their manufacture was banned in 1977, but some 

60% of all PCBs manufactured remain in use. 

PE. The population equivalent or amount of oxygen demand (see COD/BOD) generated and 

discharged by the average person each day. In a typical town, it is 1.5 to 2.0 times the population. 

P/E. Price Earnings Ratio (PER), a company’s share price divided by its historic financial year (FY) 

earnings per share. 

Pesticides: There are two main classes of pesticides: chlorinated hydrocarbons are long-lived and 

capable of being concentrated up the food chain (this is called bioaccumulation). The second group is 

the organophosphates which are short-lived and presumably degrade to 'harmless' end products, but 

whose long-term environmental impact is not yet known. 

Chlorinated hydrocarbons: 

Aldrin, Endrin, Benzene, Hexachloride, 

DDT, Dieldrin, Endosulfan and others 

Organophosphates: 

Azodrin, Malathion, Parathion, Diazinon, 

Trithiopn, Phosdrin and others 

PFI. Private Finance Initiative, a tool developed in the UK in the mid 1990s for awarding single 

projects to the private sector on a concession basis. 

Phosphates. Phosphates are another nutrient, responsible for the eutrophication that mostly stems 

from sewage effluent with the remainder mainly from agricultural inputs and from extensive use of 

detergents. 

Physicochemical treatment. The treatment of liquid wastes to reduce their environmental impact 

(see BOD/COD). 

Plumbsolvency. The ability of water to dissolve lead from piping or solder. Soft waters (e.g. granite) 

are more plumbsolvent than hard waters (e.g. chalk). Soft water is defined as water that has less than 

60 milligrams of calcium carbonate (lime) per litre. 

Potable. Water that is fit for human consumption, as defined by World Health Organisation (WHO), 

EU or national standards. 

PPP. Polluter pays principle, whereby a discharger of polluting substances pays a fee relating to the 

pollution load discharged. PPP can either be used to encourage dischargers to minimise their pollution 

loads or to finance the development of an appropriate effluent treatment network. 

PPP. Purchasing Power Parity, a tool developed to illustrate the relative purchasing power of a 

common currency (in GDP per capita terms) in different economies. One US dollar goes further in 

India than it does in Japan. 

PPP. Public-Private Partnership, where the private sector manages state or municipally held assets on 

a partnership basis. ‘PPP’ is a common TLA (triple letter acronym) affecting the water sector. 

PSP. Private Sector Participation. Another TLA for PPP. 

PWA. Provincial Water Authority. The body controlling the water and wastewater service activities in 

urban areas outside Bangkok, Thailand. 

Raw water. Water from surface or ground sources prior to treatment. 

Red List. Substances deemed harmful to the environment. Their discharge into the environment is to 

be brought under the control of the EU’s IPPC directive. Grey List substances are of intermediate 

toxicity and are subject to a less stringent set of controls. 

Reservoir. A body of water, usually artificially impounded, for maintaining controllable supplies of raw 

water. Prior to distribution, it is usually sent to a treatment works to be made potable and held in a 

service reservoir. 

River basin. A term used to designate the area drained by a river and its tributaries. 

455 



Sanitary sewers. Underground pipes that carry off only domestic or industrial waste, not storm water. 

Septic tank. Tank used to hold domestic wastes when a sewer line is not available to carry them to a 

treatment plant; part of a rural on-site sewage treatment system. 

Sewage. Domestic sewage mainly consists of human excrement. Agricultural sewage has the same 

environmental impact, but its legal status is more ambiguous (as long as it is not discharged directly 

into watercourses). 

Sewage sludge. The House of Lords, in its 1991 paper on the EU’s UWWTD perhaps harks back to 

school when describing sewage sludge as having "the consistency of thin semolina." The principal byproduct 

from sewage treatment. Typically consisting of 96-97% water and 3-4% dry solids, it is usually 

measured in terms of dry solids to allow international comparisons to be made. 

Sewage treatment. This usually involves a series of phases, each designed to progressively reduce 

the environmental and health impact of the effluent. Sewage is carried in the effluent either as solid 

matter or in dilute, suspended solids. While several performance criteria are used to assess the 

performance of a sewage treatment works (mainly, the removal of silts, BOD and ammonia), each 

level of treatment can be judged by its ability to remove these solids from the effluent stream prior to 

its final discharge. There is a fairly close relationship between ultimate solids removal and the lowering 

of an effluent stream's BOD. 

Level of treatment 

None and preliminary 

Primary 

Secondary 

Tertiary and advanced 

Process involved 

Screening out of solids 

Settlement to remove solids from effluent 

Biological treatment to remove suspended solids 

Further nutrient removal via filtration, etc. 

Level of treatment Percentage of sludge removed BOD removal 

None and preliminary 2% (range 0-5%) of sludge removed 0-5% 

Primary 30% (range 10-40%) of sludge removed 2-35% 

Secondary 90-95% of sludges removed 75-90% 

Tertiary and advanced 99-100% of sludges removed 95-98% 

• Preliminary / Screening. Intended to remove solids flushed down lavatories, such as condoms, 

tampons and nappies. Reduces the aesthetic impact of the sludge without affecting its 

environmental impact. 

• Primary. Physical treatment, where the effluent is placed in a settlement tank, so that solids are 

left behind and the liquid effluent is then discharged. 

• Secondary. Biological treatment, where the effluent trickles through inert materials such as slag, 

clinker, gravel or more recently, moulded plastic, so that it comes into contact with microorganisms, 

which oxidise and clarify the effluent. 

• Tertiary. A bit of a catch-all expression, usually referring to chemical treatment. Usually 

concerned with the removal of nutrients such as nitrogen and phosphorous. 

• Advanced treatment and disinfection. In addition, reverse osmosis membranes are being 

adopted where space is at a premium. For example, for serving a bathing area directly backing 

onto cliffs. Treatment can be extended to include further disinfection by exposing the effluent to 

ultra violet light or ozone prior to its final discharge. 

Sewerage. The collection and distribution network linking domestic and industrial properties with the 

sewage treatment system. 

Storm sewer. A system of pipes (separate from sanitary sewers) that carry only water runoff from 

building and land surfaces. 

STW. Sewage treatment works. Sewage effluents are collected at a STW for treatment, with the 

sewage sludge being separated from water for discharge. 

456 



Supply pipe. The part of the water distribution network which is on the customer’s property and thus 

usually owned by the customer, not the water supplier. The statutory obligations of water provision 

companies usually do not extend to the supply pipe. 

Surface water. All water naturally open to the atmosphere (rivers, lakes, reservoirs, streams, seas, 

estuaries). It also refers to springs and wells, which are directly influenced by surface water. 

SWC. The statutory water companies are private sector companies with a statutory obligation to 

provide water in England and Wales under the 1973 Water Act. Also known as water only companies 

(WOCs) and are distinct from the Water Plcs. 

TOT. Transfer, Operate and Transfer. A variant of the BOT contract where extant assets are taken 

over and operated for a set period of time. 

Trade effluent. Dilute wastewater (effluent) discharged by industry into the sewerage network. 

Increasingly subject to restrictions under IPPC whereby it is to be treated separately from domestic 

sewage. 

Tuck-In. Acquisitions by a major water company of small water companies within or adjacent to their 

service area, which are ‘tucked-in’ or integrated into their networks. 

Turbidity. Cloudiness caused by the presence of suspended solids in water; an indicator of water 

quality. 

UFW. Unaccounted for water. Distribution losses or leakages (q.v.), either expressed as a percentage 

of water put into the system or in terms of million litres per day (or year). Percentage losses are 

typically avoided due to their emotive impact. Often also includes illegal abstraction and unmetered 

supply that has not been billed for. 

UNCHS. United Nations Centre for Human Settlements (Habitat). Research and aid relating to urban 

areas. 

UNDP. United Nations Development Programme 

UNEP. United Nations Environment Programme. 

USAID. US direct aid programme for supporting international development project. 

USEPA. US Environmental Protection Agency. 

UWWTD. The EU’s 1991 Urban Wastewater Treatment Directive (91/271/EC). All populations of more 

than 2,000 to have suitable sewage treatment from 2005. 

WASC. Water and sewerage company, see Water Plc. 

Wastewater. Typically either sewage (q.v.) or an effluent (q.v.). Water that carries wastes from 

homes, businesses, and industries. A mixture of water and dissolved or suspended solids. 

Water consumption. Consumption is the part of a withdrawal of water that is ultimately used and 

removed from the immediate water environment whether by evaporation, transpiration, incorporation 

into crops or a product, or other consumption. 

Water contamination. Impairment of water quality to a degree which reduces the usability of the 

water for ordinary purposes, or which creates a hazard to public health through poisoning or spread of 

diseases. 

Water for Life. The United Nations’ Decade for Action launched on World Water Day, 22 nd March 

2005 for meeting the 2015 Millennium Development Goals of halving the number of people without 

access to improved water supplies and sanitation. 

Water Plc. Colloquial expression for the ten water and sewerage companies (WASCs) of England 

and Wales, which were privatised in 1989. 

Water pollution. Industrial and institutional wastes, and other harmful or objectionable material in 

sufficient quantities to result in a measurable degradation of the water quality. 

457 



Water quality. Classification of inland waters. EU classifications range from ‘Very Good’ (IA) quality 

waters that have no appreciable indicators of human activities and are capable of supporting more 

sensitive species such as Brown Trout, to ‘Poor’ (III) quality waters that support a significantly 

degraded community of plant and animal species, and ‘Bad’ (IV) quality waters that (with the exception 

of some fungi and algae) are usually incapable of supporting life. 

Water use. Water use is usually defined and measured in terms of withdrawal (q.v.) or consumption 

(q.v.) that which is taken and that which is used up. Not all water withdrawn is consumed, but is 

instead returned to a surface or ground water source from a point of use and becomes available for 

further use. 

Water withdrawal. Withdrawal refers to water extracted from surface or ground water sources 

WB. World Bank. Loans targeting services and infrastructure at the pre-privatisation phase. Broad 

remit to encourage cost recovery and commercialisation. 

WBCSD. World Business Council for Sustainable Development. 

Wet tonne. A weight of measure for sewage sludge or industrial effluent. In the case of sewage 

sludges, this usually refers to material removed from the sewage treatment process. Sewage sludge 

usually consists of 95-98% water, falling to 75-85% after basic drying. The variability of the water 

content makes wet tonnes an inconsistent measure of sewage generation, hence the use of dry 

tonnes when comparing sewage data. 

WFD. The EU’s 2000 Water Framework Directive. Inland waters to be of “good ecological quality” by 

2012-15. Calls for cost recovery from 2010 and water management at the river basin level. The 

expected practical compliance date will be during the third assessment cycle, ending in 2029. 

WHO. World Health Organisation. Sets Global Standards for drinking water quality, as specified in its 

‘Guidelines for Drinking-water Quality’ (3 rd edition published in 2004). 

WOC. See SWC. 

WRI. World Resources Institute, United States. Independent body researching the use and abuse of 

natural resources. 

WTW. Water treatment works render raw (untreated) water potable or fit for human consumption. 

WWC. World Water Council. Organises the triennial World Water Fora (WWF, q.v.) 

WWF. World Water Forum. A global gathering of people involved in water issues that as in 2000 has 

the potential to set the policy agenda or as in 2003 to become mired in polemic. Four have been held 

to date and the fifth is in preparation: WWF 1; Morocco 1997, WWF 2; The Netherlands 2000, WWF 3; 

South Africa 2003, WWF 4; Mexico 2006 and WWF5; Turkey 2009. 

WWTW. Wastewater treatment works, another term for sewage treatment works. 

WWV. The World Water Vision. Drawn up at the Second World Water Forum (see WWF) in 2000, this 

project envisages universal access to safe water and sanitation by 2025. 

458 


APPENDIX 5: REFERENCES AND FURTHER READING 

APPENDIX 5: 

REFERENCES AND FURTHER READING 

459 




Important sources of country information are included in the relevant country entries. Information on 

individual companies and privatisation contract awards has been obtained from company annual 

reports, press releases and web sites, along with analyst briefings and visits since 1989. Copious use 

of the following periodicals has been made: 

• Source Water & Sanitation Weekly (fortnightly) 

• The Global Water Report (fortnightly, to October 2006) 

• Global Water Intelligence (monthly) 

• Asian Water (monthly) 

This survey mainly covers secondary sources, reviews and overviews rather than reports on field data 

and primary academic papers, except where they illustrate particular points or the state of the art at 

the time. It is a provisional list and in general excludes press releases, internal studies and material 

solely posted on the Internet. 

General reviews 

The country data entries have broadly been based upon the publications below. The exceptions are 

where other sources are more recent, or where they have provided information not available in these 

publications. 

GEO-3 (2002) Global Environment Outlook 3. UNEP, Earthscan, London, UK 

Human Development Report 2003 (2003) Millennium Development Goals: A compact among nations 

to end human poverty. UNDP, United Nations, New York, USA 

Human Development Report 2004 (2004) Cultural Liberty in Today’s Diverse World. UNDP, United 

Nations, New York, USA 

Human Development Report 2005 (2005) International cooperation at a crossroads: Aid, trade and 

security in an unequal world. UNDP, United Nations, New York, USA 

Human Development Report 2007/08 (2007) Fighting climate change: Human solidarity in a divided 

world. UNDP, United Nations, New York, USA 

OECD Environmental Performance Reviews, OECD, Paris: 

• Austria (2003, 2008) 

• Australia (2008) 

• Belgium (2007) 

• Canada (2004) 

• Chile (2005) 

• China (2007) 

• Denmark (2008) 

• France (2008) 

• Germany (2001) 

• Hungary (2008) 

• Ireland (2000) 

• Italy (2001) 

• South Korea (2006) 

• Japan (2002) 

• Mexico (2003) 

• Netherlands (2003) 

• New Zealand (2007) 

• Poland (2003) 

• Portugal (2001) 

• Romania (2008) 

• Spain (2004) 

• Sweden (2004) 

• Switzerland (2007) 

• Ukraine (2008) 

• United Kingdom (2002) 

• USA (2006) 

460 



Sarukhan J. & Whyte A. (2005) Millennium Ecosystem Assessment: MEA Synthesis Report 

(www.millenniumassessment.org) 

Transparency International (2008) Global Corruption Report 2008: Corruption in the Water Sector 

Cambridge University Press, Cambridge 

United Nations (2007) World Urbanization Prospects: The 2007 Revision; Data Tables and Highlights. 

Population Division, New York, Department of Economic and Social Affairs, UN Secretariat 

UNEP (2006) Challenges to International Waters – Regional Assessments in a Global Perspective. 

United Nations Environment Programme, Nairobi, Kenya. 

UNCHS Habitat (2007) Enhancing urban safety and security: Global Report on Human Settlements 

2007. United Nations Human Settlements Programme, UN-HABITAT, Earthscan, London 

UNCHS Habitat (2006) Meeting development goals in small urban centres: Water and sanitation in the 

world’s cities 2006. United Nations Human Settlements Programme, UN-HABITAT, Earthscan, London 

UNCHS Habitat (2003) The Challenge of Slums: Global Report on Human Settlements 2003. United 

Nations Human Settlements Programme, UN-HABITAT, Earthscan, London 

UNCHS Habitat (2003) Water and Sanitation in the World’s Cities: Local Action for Global Goals, 

Earthscan, London, UK 

UNCHS Habitat (2001) Cities in a Globalizing World: Global Report on Human Settlements, 2001. 

Earthscan, UK 

UNESCO (2003) World Water Development Report - Water for People, Water for Life, United Nations 

Educational, Scientific and Cultural Organization (UNESCO), Paris, France 

UNESCO (2003) Water a shared responsibility - The United Nations World Water Development Report 

2, United Nations Educational, Scientific and Cultural Organization (UNESCO), Paris, France 

United Nations Development Programme (2006) Beyond scarcity: Power, poverty and the global water 

crisis Human Development Report 2006. UNDP, New York, USA 

WHO / UNICEF (2008) Progress on drinking water and sanitation: special focus on sanitation, WHO 

Geneva 

WHO / UNICEF (2005) Water for life: making it happen, JMP, Geneva 

World Bank (2003) Water Resources Sector Strategy: Strategic Directions for World Bank 

Engagement, World Bank Washington DC, USA 

World Bank (2003) World Development Report, 2004: Making Services Work for Poor People, World 

Bank, Washington DC, USA 

World Development Report 2005 (2004) A Better Investment Climate for Everyone. WRI, UNDP, 

UNEP, World Bank, OUP, Oxford, UK. 

World Development Report 2006 (2005) Equity and Development. WRI, UNDP, UNEP, World Bank, 

OUP, Oxford, UK. 

World Development Report 2007 (2006) Development and the next generation. WRI, UNDP, UNEP, 

World Bank, OUP, Oxford, UK. 

World Investment Report (2008) Transnational Corporations and the Infrastructure Challenge, 

UNCTAD, Geneva 

WRI (2003) World Resources, 2002-04: Decisions for the Earth. World Resources Institute, 

Washington DC, USA 

461 


Overviews of water provision issues 


ADB (2004) Water in Asian Cities, Asian Development Bank, Manila, Philippines 

ADB (2007) Water development outlook, Asian Development Bank, Manila, Philippines 

Eisebreich S.J., ed. (2005) Climate Change and the European Water Dimension, EU Report 21553, 

DG JRC, Italy 

Cairncross S, ed. (2003) Water & Sanitation in the Worlds Cities: Local Action for Global Goals. United 

Nations Human Settlements Programme. UN-HABITAT, Earthscan, London 

Gleick, P.H. et al. (2004) The World's Water 2004-2005: The Biennial Report on Freshwater 

Resources. Island Press, Washington, D.C. 

Gleick, P.H. et al. (2002) The World's Water 2002-2003: The Biennial Report on Freshwater 

Resources. Island Press, Washington, D.C. 

Gleick, P.H. (2000) The World's Water 2000-2001: The Biennial Report on Freshwater Resources. 

Island Press, Washington, DC 

Gleick, P.H. (1998) The World's Water 1998-1999: The Biennial Report on Freshwater Resources. 

Island Press, Washington, DC 

Kundzewicz, Z.W., L.J. Mata, N.W. Arnell, P. Döll, P. Kabat, B. Jiménez, K.A. Miller, T. Oki, Z. Sen 

and I.A. Shiklomanov, 2007: Freshwater resources and their management. Climate Change 2007: 

Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment 

Report of the Intergovernmental Panel on Climate Change, M.L. Parry, O.F. Canziani, J.P. Palutikof, 

P.J. van der Linden and C.E. Hanson, Eds., Cambridge University Press, Cambridge, UK, 173-210. 

Le Quesne, T, Pegram, G, & Von Der Heyden, C (2007) Allocating scarce water. A WWF primer on 

water allocation, water rights and water markets. WWF-UK, United Kingdom 

Mcintosh, A. C. (2003) Asian Water Supplies: Reaching the Urban Poor. Asian Development Bank / 

IWA Publishing, London 

Owen, D A Ll (2006) Financing Water and Wastewater 2006-2025: From Necessity to Sustainability. 

Thomson Financial, London 

Pearce F (2006) When the rivers run dry: What happens when our water runs out? Eden Project 

Books, London 

Prüss A , Kay D, Fewtrell L & Bartram J (2002) Estimating the Burden of Disease from Water, 

Sanitation, and Hygiene at a Global Level, Environmental Health Perspectives, 110 / 5, 537-542 

UNESCO-WWAP (2006) Water a shared responsibility: The United Nations World Water Development 

Report 2. UNESCO, Paris, France 

Water Supply and Sanitation Collaborative Council (2004) Resource Pack on the Water and Sanitation 

Millennium Development Goals, WSSCC, Geneva, Switzerland 

WHO (2000) Global Water Supply and Sanitation Assessment. WHO, UNICEF & WSSCC, USA. 

WHO (2004) Guidelines for Drinking-water Quality. Third edition. WHO, Geneva 

Water Supply and Sanitation Collaborative Council (2004) Resource Pack on the Water and Sanitation 

Millennium Development Goals, WSSCC, Geneva, Switzerland 

WSP (2008) Performance Improvement Planning: Developing Effective Billing and Collection 

Practices, Water & Sanitation Program, South Asia, New Delhi 

WSP (2008) Performance Improvement Planning: Designing an Effective Leakage Reduction and 

Management Program, Water & Sanitation Program, South Asia, New Delhi 

462 



WSP (2008) The Sanitation Business: 100 million customers await you! The National Development 

Planning Agency, Jakarta, Indonesia 

WSP (2008) Economic Impacts of Sanitation in Southeast Asia: A four-country study conducted in 

Cambodia, Indonesia, the Philippines and Vietnam under the Economics of Sanitation Initiative(ESI), 

The World Bank, Jakarta, Indonesia 

WSP (2007) Performance Improvement Planning: Upgrading and Improving Urban Water Services, 

Water & Sanitation Program, South Asia, New Delhi 

WSP (2007) Taking Water and Sanitation Services to the Urban Poor, Water & Sanitation Program, 

South Asia, New Delhi 

Water economics and policy 

Ahmed R. (2003) DSK: a model for securing access to water for the urban poor. WaterAid, London, 

UK 

Baietti A, Kingdom W & van Ginneken M (2006) Characteristics of well Performing Public Water 

Utilities. Water Supply & Sanitation Working Notes Note No. 9, May 2006 The World Bank, 

Washington, DC, USA 

Bannister, M (2003) Corruption in development – a killing virus. 29th WEDC International Conference 

Abuja, Nigeria, 2003. WEDC, Loughborough, UK 

le Blanc, D (2007) A Framework for Analyzing Tariffs and Subsidies in Water Provision to Urban 

Households in Developing Countries. Division for Sustainable Development, United Nations 

Brikké F. & Rojas J. (2001) Key Factors for Sustainable Cost Recovery in the context of communitymanaged 

water supply. Occasional Paper Series 32-E, IRC International Water and Sanitation Centre, 

Delft, The Netherlands 

Cardone R & Fonseca C (2006) Financing Facilities for the Water Sector , Thematic Overview Paper 

13, IRC International Water and Sanitation Centre, IRC, Delft, The Netherlands 

Collignon, B & Vezina, M (2000). Independent Water and Sanitation Providers in African Cities. World 


Cosgrove, W J & Rijsbnerman, F R (2000). World Water Vision: Making Water Everybody’s Business. 

WWC, Earthscan, UK. In addition, 18 regional documents were published in 1999 

Dole, D. and Bartlett, I. (2004). Beyond cost recovery: setting user charges for financial, economic, 

and social goals. (Technical note /ERD-ADB; no. 10). Manila, Philippines, Asian Development Bank 

Dubreuil C (2006) The Right to Water: From concept to implementation World Water Council. 2006 

Elshorst H & O’ Leary D (2005) Corruption in the Water Sector: Opportunities for Addressing a 

Pervasive Problem, Transparency International 

Emerton, L & Bos, E (2004) Value: Counting ecosystems as water infrastructure. IUCN, Gland, 

Switzerland 

FAO (2006) Stakeholder-oriented valuation to support water resources management processes 

Confronting concepts with local practice, FAO Water Report 30, UN, Rome, Italy 

Foster, V and Yepes T (2005) Is Cost Recovery A Feasible Objective for Water and Electricity? A 

background paper commissioned for the World Bank, and quoted in Fay, M & Morrison M (2005) 

Infrastructure in Latin America & the Caribbean: Recent Developments and Key Challenges. Volume I: 

Main Report & Volume II: Annexes, Report No. 32640-LCR, World Bank, Washington DC, USA 

Frankhauser S & Tepic S (2005) Can poor consumers pay for energy and water? EBRD, London 

Foxwood, N. and Green, J. (2004). Making every drop count: an assessment of donor progress 

towards the water and sanitation target. Teddington, UK, Tearfund 

463 



Gunatilake, H, Yang, J-C, Pattanayak, S & van den Berg, C, (2006) Willingness-to-pay and design of 

water supply and sanitation projects: A case study. ERD Technical Note No 19, ADB, Manila, 

Philippines 

Hearne, R. R. & Trava, J. L. (1997) Water Markets in Mexico: Opportunities and Constraints 

Discussion Paper D 97-01, Environmental Economics Programme, IIED, London 

Hutton, G & Haller, L (2004) Evaluation of the costs and benefits of water and sanitation improvements 

at the global level. WHO / SDE / WSH. World Health Organization 2004 

IIED (2002) Financing for Sustainable Development. IIED, London 

Johnstone, N. (1997) Economic Inequality and the Urban Environment: The Case of Water and 

Sanitation. Discussion Paper D 97-03, Environmental Economics Programme, IIED, London 

Kingdom, B, Liemberger, R & Marin P (2006) The Challenge of Reducing Non-Revenue Water (NRW) 

in Developing Countries How the Private Sector Can Help: A Look at Performance-Based Service 

Contracting. Water Supply and Sanitation Sector Board Discussion Paper Series, Paper No.8, World 


Komives K, Halpern J, Foster V & Wodon Q (2006) The Distributional Incidence of Residential Water 

and Electricity Subsidies World Bank Policy Research Working Paper 3878, April 2006 The World 

Bank, Washington, DC, USA 

Lenton R. (2003) Background Paper of the Taskforce on Water and Sanitation, Millennium Project, 

UNDP 

Littlefair, K. (1998) Willingness to Pay for Water at the Household Level: Individual Financial 

Responsibility for Water Consumption, Occasional Paper No. 26, SOAS Water Issues Study Group, 

University Of London 

Marshall J. et al (2002) Water and Sanitation in Tanzania: Poverty Monitoring for the sector using 

national surveys. WaterAid, London, UK 

McGranahan, G. et. al. (2001) The Citizens at Risk: From Urban Sanitation to Sustainable Cities, SEI / 

Earthscan, London UK 

McGranahan, G. (2002) Demand-Side Water Strategies and the Urban Poor, PIE Series No.4, IIED, 

London 

McIntosh, A. (2003) Asian Water Supplies: Reaching the Urban Poor, Asian Development Bank / 

International Water Association, London 

Mehta, M. (2004) Meeting the Financing Challenge for Water Supply and Sanitation: Incentives to 

promote reforms, leverage resources, and improve targeting. The World Bank, Washington DC, USA 

Mohajeri M et al (eds) (2003) Aqualibrium: European water management between regulation and 

competition, European Commission, Directorate 1, Brussels 

Nigan A. (1996) ‘Sustainable financing of WATSAN’ 22 nd WEDC Conference, WEDC, Loughborough, 

UK 

OECD (2002) Environmental benefits of foreign direct investment: A literature review, OECD Paris, 

France 

OECD (2003) Financing Strategies for Water and Environmental Infrastructure, OECD Paris, France 

OECD (2003) Aid activities in the water sector 1997-2002, OECD Paris, France 

OECD (2003) Improving Water Management: Recent OECD Experience, OECD, Paris, France 

OECD (2003) Social Issues in the Provision and Pricing of Water Services OECD, Paris, France 

OECD (2006) Cost-Benefit Analysis and the Environment OECD, Paris, France 

464 



OECD (2006) Water: the Experience in OECD Countries OECD, Paris, France 

Ofwat (2006) International comparison of water & sewerage service, 2006 Report, Ofwat, Birmingham, 

UK 

Palmer K, Cockburn M, Storer D & Hulls D (2003) Funding Johannesburg – Beyond the Rhetoric, 

Delivering the Water and Sanitation Targets Cambridge Economic Policy Associates, Cambridge, UK 

Pieris, M E (1994). Water treatment for high incomes, in ‘Affordable Water Supply & Sanitation’, 20 th 

WEDC Conference, Colombo, Sri Lanka, 1994. WEDC, Loughborough University, UK 

PricewaterhouseCoopers (2001) Water: a World Financial Issue – A Major Challenge for Sustainable 

Development in the 21st Century. Sustainable Development Series. Paris, PricewaterhouseCoopers 

Prüss-Üstün A, Bos R, Gore F, Bartram J. (2008) Safer water, better health: costs, benefits and 

sustainability of interventions to protect and promote health. World Health Organization, Geneva 

Prynn P. & Sunman H, (2000) ‘Getting the water to where it is needed and getting the tariff right’ 

(Financial Times Energy, Conference, Dublin, November 2000) 

Rijsberman, F (2004) The Water Challenge. Copenhagen Consensus Challenge Paper. Copenhagen 

Consensus project of the Environmental Assessment Institute, Copenhagen, Denmark 

Rogers P., Bhatia R, & Huber A. (1998) TEC Background Paper No 2: Water as a Social and 

Economic Good: how to Put the Principle into Practice. Global Water Partnership, Stockholm 

Rogers P. & Hall A. (2003) TEC Background Paper No 7: Effective Water Governance. Global Water 

Partnership, Stockholm 

Schwartz, K (2006) Managing Public Water Utilities An assessment of bureaucratic and New Public 

Management models in the water supply and sanitation sectors in low- and middle-income countries. 

UNESCO-IHE, Delft, the Netherlands 

SIWI (2005) Making Water a Part of Economic Development: The Economic Benefits of Improved 

Water Management and Services, SIWI, Stockholm, Sweden 

Stockholm International Water Institute (2005). Can International Water Targets be Met without 

Fighting Corruption? Stockholm World Water Week Seminar, 21 August, 2005. Background for Case 

Presenters 

Tearfund (2001) Running on Empty: A call for action to combat the crisis of global water shortages. 

Tearfund, Teddington, UK 

Tearfund & WaterAid (2002) The Human Waste: A call for action to combat the millions of deaths 

caused by poor sanitation. Tearfund, Teddington, UK 

Terry G. & Calaguas B (2003) Financing the Millennium Development Goals for domestic water supply 

and sanitation. WaterAid, London, UK 

Toubkiss J (2006) Costing MDG Target 10 on Water Supply and Sanitation: Comparative Analysis, 

Obstacles and Recommendations World Water Council (2006) 

Trémolet S. & Hunt C (2006) Taking Account of the Poor in Water Sector Reguation, Water Supply & 

Sanitation Working Notes, Note No. 11, August 2006 The World Bank, Washington, DC, USA 

Triche T, Requena S & Karuiki M (2006) Engaging local private operators in water supply & sanitation 

services. Water Supply & Sanitation Working Notes, No 12, December 2006, World Bank, Washington 

DC, USA 

Tynan N. & Kingdom B. (2003) A Water Scorecard: Setting Performance Targets for Water Utilities. 

Public policy for the private sector Note 242, World Bank (April 2002): 2 

Van den Berg, C, Pattanayak, S Yang, J-C & Gunatilake H (2006) Getting the Assumptions Right: 

Private Sector Participation Transaction Design and the Poor in Southwest Sri Lanka. Water Supply 

and Sanitation Sector Board Discussion Paper Series, Paper No.7, World Bank, Washington DC, USA 

465 



Van Dijk M P (2003) Liberalisation of Drinking Water in Europe and Developing Countries, UNESCO- 

IHE Institute for Water Education, Delft, The Netherlands 

Van Hofwegen P (2006) Task Force on Financing Water For All: Enhancing access to finance for 

local governments Financing water for agriculture, Chaired by Angel Gurria, World Water Council 

(2006) 

Vives, A, Paris A M Benavides J, Raymond, P D Quiroga D & Marcus J (2006) Financial Structuring of 

Infrastructure Projects in Public-Private Partnerships: An Application to Water Projects, IADB, 

Washington, USA 

WaterAid & Tearfund (2003) New Rules, New Roles: Does PSP benefit the poor? Tearfund, 

Teddington, UK 

WaterAid (2006) Bridging the gap: Citizens’ Action for accountability in water and sanitation, WaterAid, 

London 

WaterAid (2008) Think local, act local: Effective financing of local governments to provide water and 

sanitation services, WaterAid, London 

WaterAid (2008) Beyond Construction: Use by all, WaterAid, London 

WaterAid (2004) The education drain, WaterAid, London 

WMO (1992), International Conference on Water and the Environment: Development Issues for the 

21 st Century: The Dublin Statement and Report of the Conference, World Meteorological Organization, 

Geneva 

Winpenny J. (2003) ‘Financing water for all. Report of the World Panel Financing Water Infrastructure, 

Chaired by Michael Camdessus’ Global Water Partnership / World Water Council / 3 rd World Water 

Forum 

World Bank (2005) Water Supply and Sanitation Lending: Volume Rises, Quality Remains High Water 

Supply and Sanitation Feature Story The World Bank, Washington, DC, USA 

World Business Council for Sustainable Development (2006) Business in the world of water: WBCSD 

Water Scenarios to 2025 

Zabel T (2002) Pricing Mechanisms in the Water Sector in Selected OECD Countries, in Promoting 

Environmentally Sustainable Development in Asia, OECD Emerging Asian Economies Programme, 

OECD Paris 

History of water provision issues 

Allan, J.A. (2001) The Middle East Water Question: Hydropolitics and the Global Economy. I B Taurus, 

London 

Barty-King, H (1992). Water, The Book. WSA, London 

Cosgrove W.J. (2003) Water Security and Peace: A Synthesis of Studies Prepared under the PCCP- 

Water for Peace Process, UNESCO IHP PCCP Series No 29, Montreal, Canada 

De Villiers M (1999). Water Wars. Weidenfeld & Nicholson, London 

Hassan F.F., et al (2001) History and Future of Shared Water Resources, UNESCO IHP PCCP Series 

No 6, Montreal, Canada 

Jacobson, Charles D., and Joel A. Tarr. 1996. "No Single Path: Ownership and Financing of 

Infrastructure in the 19th and 20th Centuries." In Ashoka Mody, ed., Infrastructure Delivery: Private 

Initiative and the Public Good. Washington D.C. World Bank 

Tynan, Nicola. 2002. "London's Private Water Supply, 1582-1902." In Paul Seidenstat, David 

Haarmeyer, and Simon Hakim, eds., Reinventing Water and Wastewater Systems: Global Lessons for 

Improving Management. New York: John Wiley and Sons, Inc 

466 



Private sector participation and water 

Bakker K (2003) An Uncooperative Commodity: Privatizing Water in England and Wales, OUP, 

Oxford, UK 

Balen M (2006) Water for Life: The case for private investment and management in developing 

country water systems. Globalisation Institute, London UK 

Banco Interamericano de Desarrollo (2007) Salida de operadores privados internacionales de agua en 

América Latina, IADB, Washington DC 

Berg C. van den (2000) Water Concessions: Who Wins, Who Loses, and What To Do About It, Public 

Policy for the Private Sector Note 217, World Bank, Washington DC, USA 

Bitran G.A. & Valenzuela, E.P. (2003) ‘Public Services in Chile: Comparing Private and Public 

Performance’. Public Policy for the Private Sector Note 255, World Bank, Washington DC, USA 

Budds, J. & McGranahan, G. (2003) Privatization and the provision of urban water and sanitation in 

Africa, Asia and Latin America. Human Settlements Discussion Paper Series. Theme: Water-1. IIED, 

London 



Chenoweth J & Bird J ed. (2005) The business of water and sustainable development, Greenleaf, 

Sheffield, UK 

Cowen P.B. & Tynan N. (1999) ‘Reaching the Urban Poor with Private Infrastructure’ Public Policy for 

the Private Sector Note 188, World Bank, Washington DC, USA 

Dalton G. (2001) ‘Private sector finance for water sector infrastructure: what does Cochabamba tell us 

about using this instrument?’ Water Issues Study Group, School of Oriental and African Studies 

(SOAS), University of London (Occasional Paper No 37, 2001) 

Elhadj, E (2001a) Islamic Finance to Aid Water Utilities, Occasional Paper No. 36, SOAS Water Issues 

Study Group, University Of London 

Elhadj, E (2001b) Financing Major Water Projects in the Poorest Economies, Occasional Paper No. 

36, SOAS Water Issues Study Group, University Of London 

Europe Economics (2003) Scope for Efficiency Improvement in the Water and Sewerage Industries. 

Europe Economics, London 

Fellows W. et al (2003) Reforming the Nigerian Water and Sanitation Sector. 29th WEDC International 

Conference Abuja, Nigeria, 2003. WEDC, Loughborough, UK 

Finger, M. & Allouche J. (2001) Water Privatisation, Spon Press, UK 

Franceys, R (1997). Private Sector Participation in Water and Sanitation Services. Water Resources 

Occasional Paper No. 3, WEDC, Loughborough University, UK 

Galiani S., Gertler P. & Schargrodsky E. (2002) Water for Life: The Impact of the Privatisation of Water 

Services on Child Mortality, Stanford Institute for Economic Policy Research, Stanford University, USA 

Ginneken, M. van, Tyler, R. & Tagg, D. (2004) Can the Principles of Franchising be used to Improve 

Water Supply and Sanitation Services? – A Preliminary Analysis. World Bank Water Supply and 

Sanitation Sector Board Discussion Paper Series, No 2 

Gomez-Lobo A., Foster V. & Halpern, J. (2000) Infrastructure Reform, Better Subsidies, and the 

Information Deficit, Public policy for the private sector Note 212, World Bank (June 2000) 

Green J (ed) (2001) Community participation in urban water services. Tearfund, Teddington, UK 

467 



Guash, J.L., Laffont, J-J. & Straub. S. (2003) Regulation of Concession Contracts in Latin America, 

World Bank Discussion Paper, Washington DC, USA 

Guasch J L, Laffont, J J & Straub S (2005) Infrastructure Concessions in Latin America: Governmentled 

Renegotiations World Bank Policy Research Working Paper 3749, October 2005 The World Bank, 


GWP (2000) TEC Background Paper No 4: Integrated Water Resources Management. Global Water 

Partnership, Stockholm 

GWP (2003) TEC Background Paper No 8: Poverty Reduction and IWRM. Global Water Partnership, 

Stockholm 

Haarmeyer, D. & Mody, A. (1998) Worldwide Water Privatisation, Financial Times Energy, London 

Harris, C., Hodges, J., Schur M. & Shukla P. (2003) ‘Infrastructure Projects: A Review of Canceled 

Private Projects’ Public policy for the private sector Note 252, World Bank (January 2003) 

Harris, C., Hodges, J., Schur M. & Shukla P. (2003) ‘Infrastructure Projects: A Review of Canceled 

Private Projects’ Public policy for the private sector Note 252, World Bank (January 2003) 

IADB (2006) Financial Structuring of Infrastructure Projects in Public-Private Partnerships: An 

Application to Water Projects, IADB, Washington DC 

Johnstone, N. & Wood, J. (2001). Private Firms and Public Water, IEED, London, UK 

Johnstone, Nick and Libby Wood (2000), 'Private Sector Participation in Water and Sanitation: 

Realising Social and Environmental Objectives in Developing Countries', Edward Elgar (forthcoming) 

Kessides, I. N. (2004) Reforming Infrastructure: Privatization, Regulation and Competition, World 

Bank, Washington DC, USA / Oxford University Press, UK 

Komives K. & Prokopy L. S. (2000) Cost Recovery in Partnership: Results, Attitudes, Lessons and 

Strategies. Business Partners for Development, London, UK 

Lauber, W (2006) Privatisierung des Wassersektors in Europa: Reformbedarf oder Kapitalinteressen? 

Österreichischer Städtebund, Vienna, Austria 

Lee, S (2007), Water and Development in China, Studies on Contemporary China Vol. 6, World 

Scientific, Singapore 

Lovei, M & Gentry, B S (2002). Implications of Privatization: Lessons for Developing Countries. World 

Bank Discussion Paper 426, The World Bank Washington, D.C. USA 

Mohajeri. S et al (2003) Aqualibrium: European Water Management between Regulation and 

Competition. EU, DG I, Brussels, Belgium 

Moore P. & Urquhart P. (2004) Global Water Scoping Process 

OECD (2000) Global trends in urban water supply and waste water finance and management: 

changing roles for the public and private sectors, OECD, Paris 

Ononski K (2006) The Water Revolution: Practical Solutions to Water Scarcity, International Policy 

Press, London 

Plummer, J. (2002) Focussing Partnerships: A Sourcebook for Municipal Capacity Building in Public- 

Private Partnerships, Earthscan, London, UK 

PPIAF (2002) Private Infrastructure: A Review of Projects with Private Participation, 1990-2000. Public 

Policy for the Private Sector Note 246, World Bank, Washington DC, USA 

Rees J. A. (1998) TEC Background Paper No 1: Regulation and Private participation in the Water and 

Sanitation. Global Water Partnership, Stockholm 

468 



Rees J. A. (2002) TEC Background Paper No 6: Risk and Integrated Water Resources Management. 

Global Water Partnership, Stockholm 

Riskong K, Hammond M E & Locussol (2007) Using management and lease-affermarge contracts for 

water supply: How effective are they in improving water supply? Gridlines 12, The World Bank, 

Washington DC 

Rivera, D. (1996) 'Private Sector Participation in Water Supply and Sanitation: Lessons from Six 

Developing Countries', World Bank, Directions in Development, Washington DC, USA 

Sohail M. ed. (2002) ‘Public Private Partnerships and the Poor’ 8 papers, WEDC, Loughborough, UK 

Solo, T. M. (2003) Independent Water Entrepreneurs in Latin America: The other private sector in 

water services. World Bank, Biblos, Lima, Peru 

Tremolet, S. (2003) Rural Water Service: Is a Private National Operator a Viable Business Model? 

Public Policy for the Private Sector Note 249, World Bank, Washington DC, USA 

Tynan N. (2000) ‘Private sector participation in infrastructure and the poor: Water and sanitation’ 

Infrastructure for Development: Private Solutions and the Poor, London, UK 

Tynan N. & Kingdom B. (2003) A Water Scorecard: Setting Performance Targets for Water Utilities. 

Public policy for the private sector Note 242, World Bank (April 2002): 2 

World Bank (2002) Water Supply and Sanitation in PRSP Initiatives: A Desk Review of Emerging 

Experience in Sub-Saharan Africa (SSA). World Bank, Washington DC, USA 

World Bank (2004) East Asia & Pacific Private Investors in Infrastructure: Perception Survey. World 


World Bank (2006) Approaches to Private Participation in Water Services: A Toolkit. The World Bank, 


World Bank (2006) The challenge of reducing non-revenue water in developing countries: How the 

private sector can help – A look at performance-based service contracting. The World Bank, 


WBSCD (2005) Collaborative actions for sustainable water management. The role business can play 

as an active stakeholder in collaborative processes for water management. World Business Council 

for Sustainable Development, Geneva, Switzerland 

WBSCD (2006) Business in the world of water: WBCSD Water Scenarios to 2025. World Business 

Council for Sustainable Development, Geneva, Switzerland 

WWC (2004) Proceedings of the Workshop on Water & Politics: Understanding the Role of Politics in 

Water Management, Marseille, February 26-27, 2004 


Alghariani, S. A. (2003) Water Transfer versus Desalination in North Africa: Sustainability and Cost 

Comparison. Occasional Paper No. 49, SOAS Water Issues Study Group, University Of London 

Allan, J.A. (2003) Virtual Water - The Water, Food, and Trade Nexus Useful Concept or Misleading 

Metaphor? IWRA, Water International, Volume 28, Number 1 

Bates, B.C., Z.W. Kundzewicz, S. Wu and J.P. Palutikof, Eds., (2008) Climate Change and Water. 

Technical Paper of the Intergovernmental Panel on Climate Change, IPCC Secretariat, Geneva 

Fisher FM & Huber-Lee A (2005) Liquid Asseys: An economic approach for water management and 

conflict resolution in the Middle East and beyond. Resources for the Future, Washington DC, USA 

Gleick, P. H. (2000) The changing water paradigm: A look at twenty-first century water resources 

development. Water International, Vol. 25, No. 1, pp. 127-138. 

469 



JHU (1998) Solutions for a Water-Short World, Population Information Program, John Hopkins 

University, USA 

Merrett, S. (2003a) Virtual Water and the Kyoto Consensus: A Water Forum Contribution. International 

Water Resources Association, Water International, Volume 28, Number 4, Pages 540–542 

Merrett, S. (2003b) ‘Virtual Water’ and Occam’s Razor. Occasional Paper No. 62, SOAS Water Issues 

Study Group, University Of London 

Serageldin, I (1994). Water Supply, Sanitation and Environmental Sustainability: The Financing 

Challenge. IBRD/World Bank, USA 

Corporate approaches towards water provision 

This is, to the author’s best knowledge, a comprehensive listing of English-language stand-alone 

corporate publications addressing the need for the private sector to play a role in extending water and 

sanitation services. 

Aquafed (2007a) Practitioners’ Views on the Right to Water, Aquafed, Brussels, Belgium 

Aquafed (2007b) 2005-2008 Progress on CSD13 decisions on water and sanitation – Perception of 

Private Water Operators. Aquafed, Brussels, Belgium 

Lyonnaise des Eaux (1998) Alternative Solutions for Water Supply and Sanitation in Sectors with 

Limited Financial Resources, Lyonnaise des Eaux, Paris 

Suez (2002) Bridging the Water Divide, Suez Ondeo, Paris 

Suez (2006) Water for All, Suez Environnement, Paris 

Suez (2007) Human Rights and Access to Drinking Water and Sanitation. Contribution to OHCHR 

Consultation, Suez, Paris 

Thames Water (2002) ‘Planet Water’ 1 st edition, Thames Water Plc, Reading UK 

Thames Water (2003) ‘Planet Water’ 2 nd edition, Thames Water Plc, Reading UK 

Veolia (2007) The right to water: from concept to effective implementation, Veolia Environnement, 

Paris 

WEF (2008) World Economic Forum Water Initiative Realizing the Potential of Public-Private 

Partnership Projects in Water, Davos, Switzerland 

Critiques of PSP and water 

This is a selection of the more influential books, publications and papers either highlighting areas 

which the private sector needs to address or by the outright opposition of the use of private sector 

finance and management. With one illustrative exception, publications which include exclamation 

marks in their titles have been omitted. 

Recent research initiatives looking at European water provision from a historic perspective 

(WaterTime, sponsored by the European Union) and Latin America and Africa (Prinwass – Barriers to 

and conditions for the involvement of private capital and enterprise in water supply and sanitation in 

Latin America and Africa: Seeking economic, social, and environmental sustainability) highlight an 

informed critical engagement with PSP by the academic community in general. 

Barlow M. & Clarke T. (2002). Blue Gold: The Fight to Stop the Corporate Theft of the World’s Water. 

The New Press, NY, USA 

Barlow M (2007) Blue Covenant: The Fight for Water as a Human Right. Toronto, McClelland & 

Stewart 

Brennan B., et al (2004) Reclaiming Public Water! Participatory alternatives to privatization, TNI 

Briefing Series 2004/7, TNI, Amsterdam, The Netherlands 

470 



Consumers International (2004) Water Works: A consumer advocacy guide to water & sanitation, CI, 

London 

Food & Water Watch (2006) Faulty Pipes: Why Public Funding – Not Privatization – is the Answer for 

U.S. Water Systems. Food & Water Watch, Washington DC, USA 

Foxwood, N. and Green, J. (2004) Making every drop count: an assessment of donor progress 

towards the water and sanitation target. Teddington, UK, Tearfund 

Gleick P. H. et al. (2002) The New Economy of Water: The Risks and Benefits of Globalization and 

Privatization of Fresh Water. Pacific Institute, Oakland, California 

Hall, D. (1999) Privatization, Multinationals and Corruption, Development in Practice 9 (5) 

Hall, D. (2004) Water Finance – A Discussion Note. PSIRU, University of Greenwich, UK 

Hall, D., Lobina, E. & de la Motte, R. (2003) Public solutions for private problems? Responding to the 

shortfall in water infrastructure investment, PSIRU, University of Greenwich, UK 

Hall, D. & Lobina, E. (2006) Pipe dreams: The failure of the private sector to invest in water services in 

developing countries. World Development Movement / PSIRU, London, UK 

Hall, D. & Lobina, E. (2007) Water as a public service. PSIRU, Business School, University of 

Greenwich 

Hall, D., & de la Motte, R. (2004) Dogmatic Development: Privatisation and conditionalities in six 

countries. PSIRU / War on Want, PSIRU, University of Greenwich, UK 

Hukka, J.J. and Katko, T.S. (2003) Water privatisation revisited: panacea or pancake? (Occasional 

paper series; no. 33-E) Delft, The Netherlands: IRC International Water and Sanitation Centre 

Lobina, E. (2003) Problems with private water concessions: a review of experience. PSIRU, University 

of Greenwich, UK 

Lobina, E. & Hall, D. (2003) Water privatisation and restructuring in Latin America, 2007. PSIRU, 

Business School, University of Greenwich 

Hasan, S. (2001) The Privatisation Process of Water and Sewerage Services in an Asian Metropolis: 

Global Politics, Organisations and Local Poor; a Case Study of Karachi Occasional Paper No. 34, 

SOAS Water Issues Study Group, University Of London 

Oxfam (2006) In the Public Interest: Health, Education, Water and Sanitation for all. Oxfam / Wateraid, 

Oxford, UK 

Wagner J. M. et al. (2003) Human Rights and the Environment. Earthjustice, Oakland, California 

WaterAid Tanzania (2002) Water utility reform and private sector participation in Dar es Salaam, 

WaterAid and Tearfund, London 

471

2008 - 2009 - Pinsent Masons Water Yearbook 2012 - 2013

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